AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON OCTOBER 24, 1997
REGISTRATION NO. 333-
=====================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
PRUDENTIAL SECURITIES STRUCTURED ASSETS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
ON BEHALF OF
RECEIPTS ON CORPORATE SECURITIES TRUST, SERIES FDX 1997-1
-------------------
Delaware 31-0944462
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
One Seaport Plaza
New York, New York 10292
(212) 214-1000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
-------------------
Greg Weatherly, Esq.
Prudential Securities Structured Assets, Inc.
One Seaport Plaza
New York, New York 10292
(212) 214-6404
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-------------------
COPIES TO:
David L. Sugerman, Esq.
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
(212) 225-2000
-------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this
Registration Statement.
If the securities being registered on this form are being offered
in connection with the formation of a holding company and there
is compliance with General Instruction G, check the following
box. [ ]
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check
the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
-------------------
CALCULATION OF REGISTRATION FEE
=====================================================================
Title of Proposed Proposed
Each Class of Maximum Maximum
Securities Amount Offering Aggregate Amount of
To be to be Price Offering Registration
Registered Registered(1) Per Share Price(2) Fee
- ---------------------------------------------------------------------
Receipts of
Corporate
Securities,
Series FDX
1997-1,
Residual
Class Not
Certificate $52,000,000 Applicable $10,829,000 $3,281
- ---------------------------------------------------------------------
(1) Certificate Principal Balance.
(2) Estimated solely for purposes of calculating the
registration fee, which was computed pursuant to Rule 457(f)
under the Securities Act of 1933, as amended based on the
book value of the Securities being registered.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE
UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND
EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
=====================================================================
<PAGE>
*********************************************************************
* Information contained herein is subject to completion or *
* amendment. A registration statement relating to these securities *
* has been filed with the Securities and Exchange Commission. These *
* securities may not be sold nor may offers to buy be accepted *
* prior to the time the registration statement becomes effective. *
* This prospectus shall not constitute an offer to sell or the *
* solicitation of an offer to buy nor shall there be any sale of *
* these securities in any State in which such offer, solicitation *
* or sale would be unlawful prior to registration or qualification *
* under the securities laws of any such State. *
*********************************************************************
SUBJECT TO COMPLETION-DATED OCTOBER 24, 1997
PROSPECTUS
Receipts on Corporate Securities Trust, Series FDX 1997-1
Offer to Exchange Receipts of Corporate Securities,
Series FDX 1997-1, Residual Class, which have been registered
under the Securities Act of 1933, as amended, for any and
all outstanding Receipts of Corporate Securities,
Series FDX 1997-1, Residual Class
The Exchange Offer will expire at 5:00 p.m.,
New York City time, on [ ], unless extended.
The Receipts of Corporate Securities, Series FDX
1997-1, Residual Class (the "New Certificates") issued by the
Receipts on Corporate Securities Trust, Series FDX 1997-1 (the
"Trust"), which have been registered under the Securities Act of
1933, as amended (the "Securities Act"), pursuant to a
Registration Statement of which this Prospectus is a part, are
hereby offered, upon the terms and subject to the conditions set
forth in this Prospectus and the accompanying letter of
transmittal (the "Letter of Transmittal" and, together with this
Prospectus, the "Exchange Offer"), in exchange for an equal
Certificate Principal Balance of outstanding Receipts of
Corporate Securities, Series FDX 1997-1, Residual Class (the "Old
Certificates"), of which $52,000,000 aggregate Certificate
Principal Balance is outstanding as of the date hereof. The Trust
was formed pursuant to a trust agreement dated as of August 28, 1997
as supplemented by the Series FDX 1997-1 Supplement (the "Trust
Agreement") between Prudential Securities Structured Assets,
Inc., as depositor (the "Company" or "PSSA") and The Bank of New
York, a New York banking corporation, as trustee (the "Trustee").
Any and all Old Certificates that are validly tendered
and not withdrawn on or prior to 5:00 P.M., New York City time,
on the date the Exchange Offer expires, which will be [ ], (30
calendar days following the commencement of the Exchange Offer)
unless the Exchange Offer is extended (such date, including as
extended, the "Expiration Date"), will be accepted for exchange.
Tenders of Old Certificates may be withdrawn at any time prior to
5:00 P.M., New York City time on the Expiration Date. The
Exchange Offer is not conditioned upon any minimum principal
amount of Old Certificates being tendered for exchange. However,
the Exchange Offer is subject to certain customary conditions,
which may be waived by the Trust, and to the terms of the
Registration Rights Agreement, dated as of August 25, 1996 (the
"Registration Rights Agreement"), between the Company and
Prudential Securities Incorporated as initial purchaser ("PSI").
Old Certificates may be tendered only in minimum denominations of
$500,000 Certificate Principal Balance and integral multiples of
$1,000 in excess thereof. See "The Exchange Offer".
The New Certificates will be entitled to the benefits
of the same Trust Agreement that governs the Old Certificates and
will govern the New Certificates. The form and terms of the New
Certificates are the same in all material respects as the form
and terms of the Old Certificates, except the New Certificates
have been registered under the Securities Act and therefore will
not bear legends restricting the transfer thereof. The New
Certificates will be issued in fully registered, certificated
form. See "The Exchange Offer" and "Description of the New
Certificates".
Based on interpretations by the staff of the Securities
and Exchange Commission (the "Commission"), as set forth in no-action
letters issued to third parties, including Exxon Capital Holdings
Corporation, SEC No-Action Letter (available April 13, 1989),
Morgan Stanley & Co. Incorporated, SEC No-Action Letter
(available June 5, 1991) and Shearman & Sterling, SEC No-Action
Letter (available July 2, 1993) (collectively, the "Exchange
Offer No-Action Letters"), the Company believes that the New
Certificates issued pursuant to the Exchange Offer may be offered
for resale, resold or otherwise transferred by holders thereof
(other than a broker-dealer who acquires such New Certificates
directly from the Trust or the Company for resale pursuant to
Rule 144A under the Securities Act or any other available
exemption under the Securities Act or any holder that is an
"affiliate" of the Company as defined in Rule 405 under the
Securities Act), without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided
that such New Certificates are acquired in the ordinary course of
such holders' business and such holders are not engaged in, and
do not intend to engage in, a distribution of such New
Certificates and have no arrangement with any person to
participate in a distribution of such New Certificates. By
tendering the Old Certificates in exchange for New Certificates,
each holder, other than a broker-dealer, will represent to the
Trust that: (i) it is not an affiliate of the Company (as defined
in Rule 405 under the Securities Act) or a broker-dealer
tendering Old Certificates acquired directly from the Company for
its own account; (ii) any New Certificates to be received by it
will be acquired in the ordinary course of its business; and
(iii) it is not engaged in, and does not intend to engage in, a
distribution of such New Certificates and has no arrangement or
understanding to participate in a distribution of the New
Certificates. If a holder of Old Certificates is engaged in or
intends to engage in a distribution of the New Certificates or
has any arrangement or understanding with respect to the
distribution of the New Certificates to be acquired pursuant to
the Exchange Offer, such holder may not rely on the applicable
interpretations of the staff of the Commission and must comply
with the registration and prospectus delivery requirements of the
Securities Act in connection with any secondary resale
transaction. Each broker-dealer that receives New Certificates
for its own account pursuant to the Exchange Offer (a "Restricted
Broker-Dealer") must acknowledge that it will deliver a
prospectus in connection with any resale of such New
Certificates. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a Restricted
Broker-Dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This
Prospectus, as it may be amended or supplemented from time to
time, may be used by a Restricted Broker-Dealer in connection
with resales of New Certificates received in exchange for Old
Certificates where such Old Certificates were acquired by such
Restricted Broker-Dealer as a result of market-making activities
or other trading activities. Pursuant to the Registration Rights
Agreement, the Company has agreed that starting on the Expiration
Date it will make this Prospectus available to any Restricted
Broker-Dealer for use in connection with any such resale. See
"Plan of Distribution". (continued on next page)
--------------------------
For a discussion of certain factors that should be
considered by participants in the Exchange Offer, see "Risk
Factors" beginning on page 11 of this Prospectus.
--------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL
CONTAIN IMPORTANT INFORMATION. HOLDERS OF OLD CERTIFICATES ARE
URGED TO READ THIS PROSPECTUS AND THE RELATED LETTER OF
TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO TENDER THEIR OLD
CERTIFICATES PURSUANT TO THE EXCHANGE OFFER.
--------------------------
The date of this Prospectus is [ ], 1997
<PAGE>
(continued from cover page)
Neither the Trust nor the Company will receive any
proceeds from this offering. The Company has agreed to pay the
expenses of the Exchange Offer. No underwriter or dealer-manager
is being utilized in connection with the Exchange Offer.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE
TRUST ACCEPT SURRENDERS FOR EXCHANGE FROM, HOLDERS OF OLD
CERTIFICATES IN ANY JURISDICTION IN WHICH THE EXCHANGE OFFER OR
THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE
SECURITIES AND BLUE SKY LAWS OF SUCH JURISDICTION.
Prior to this Exchange Offer, there has been no public
market for the New Certificates. Neither the Company nor the
Trust intends to apply for listing of the New Certificates on any
securities exchange or for quotation of the New Certificates on
The NASDAQ Stock Market's National Market or otherwise. PSI has
previously made a market in the Old Certificates and the Trust
has been advised that PSI currently intends to make a market in
the New Certificates, as permitted by applicable laws and
regulations, after consummation of the Exchange Offer. PSI is not
obligated, however, to make a market in the Old Certificates or
the New Certificates and any such market-making activity may be
discontinued at any time without notice at the sole discretion of
PSI. There can be no assurance as to the liquidity of the public
market for the New Certificates or that any active public market
for the New Certificates will develop or continue. If an active
public market does not develop or continue, the market price and
liquidity of the New Certificates may be adversely affected. See
"Risk Factors--Absence of a Public Market for the New
Certificates".
2
<PAGE>
AVAILABLE INFORMATION REGARDING THE TRUST
The Company on behalf of the Trust will be subject to the
informational requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and in accordance
therewith will file reports and other information with the
Commission relating to the Trust. Such reports, proxy statements
and other information may be inspected and copied at the
following public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549; Seven World Trade Center, 13th Floor, New
York, New York 10048; and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material may also be obtained from the Public Reference Section
of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, upon payment of prescribed
rates. The Commission maintains a Web site at http://www.sec.gov
containing reports, proxy statements and other information
regarding registrants that file electronically with the
Commission, including PSSA on behalf of the Trust.
The reports to be filed by the Company on behalf of the
Trust will consist primarily of distribution date statements
relating to the distributions made on the Trust Certificates and
certain material events regarding the Trust, but not other
financial information or statements. The reports will also refer
to the periodic reports filed by the Term Assets Issuer so long
as it is a reporting company under the Exchange Act. If the Term
Assets Issuer ceases to be a reporting company under the Exchange
Act, information regarding the Term Assets will be limited to
that received by the Trustee, as a registered holder of the Term
Assets, from the Term Assets Trustee as required by the Terms
Assets Indenture (each as defined herein).
This Prospectus constitutes a part of a registration
statement on Form S-4 (together with all amendments and exhibits,
the "Registration Statement") filed by the Company on behalf of
the Trust with the Commission, through the Electronic Data
Gathering, Analysis and Retrieval System ("EDGAR"), under the
Securities Act, with respect to the New Certificates offered
hereby. This Prospectus omits certain of the information
contained in the Registration Statement, and reference is hereby
made to the Registration Statement for further information with
respect to the Trust and Holdings and the securities offered
hereby. Although statements concerning and summaries of certain
documents are included herein, reference is made to the copy of
such document filed as an exhibit to the Registration Statement
or otherwise filed with the Commission. These documents may be
inspected without charge at the office of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and copies may be obtained at fees and charges prescribed by the
Commission.
No separate financial statements of the Trust have been
included or incorporated by reference herein. The Company does
not believe such financial statements would be material to
holders of the New Certificates because the sole asset of the
Trust consists of debt obligations of an unaffiliated issuer that
is a reporting company under the Exchange Act. See "The Term
Assets Issuer" and Appendix A attached hereto.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission as
exhibits to the Registration Statement of which this Prospectus
is a part (File No. [333- ]) are hereby incorporated by reference
in this Prospectus: the Trust Agreement dated as of August 28,
1997 between Prudential Securities Structured Assets, Inc., as
depositor and The Bank of New York, as trustee; the Series FDX
1997-1 Supplement dated as of August 28, 1997 between Prudential
Securities Structured Assets, Inc., as depositor, and The Bank of
New York, as trustee; and the Registration Rights Agreement dated
as of August 25, 1997 between Prudential Securities Structured
Assets, Inc. and Prudential Securities Incorporated.
This Prospectus incorporates documents by reference that
are not presented herein or delivered herewith. These documents
are available without charge to any person to whom a Prospectus
is delivered, upon written or oral request of such person, from
Prudential Securities Structured Assets, Inc., One Seaport Plaza,
New York, N.Y. 10292-2015, Attention: Linda Muller. In order to
ensure timely delivery of the documents, any request should be
made by [ ], 1997.
3
<PAGE>
PROSPECTUS SUMMARY
The following summary information is qualified in its
entirety by the detailed information appearing elsewhere or
incorporated by reference in this Prospectus. Prospective
investors are urged to read this Prospectus in its entirety.
The Issuer
Receipts on Corporate Securities Trust, Series FDX 1997-1
(the "Trust") formed pursuant to a Trust Agreement dated as of
August 28, 1997, between Prudential Securities Structured Assets,
Inc., as depositor (the "Company" or "PSSA"), and The Bank of New
York, a New York banking corporation, as trustee (the "Trustee"),
as supplemented by the Series FDX 1997-1 Supplement dated as of
August 28, 1997 (together, the "Trust Agreement"). PSSA is a
Delaware corporation and a wholly-owned subsidiary of Prudential
Securities Group Inc. ("PSGI"). On August 28, 1997, PSSA
deposited $52,000,000 aggregate principal amount of 7.60% Notes
due July 1, 1997 (the "Term Assets") issued by Federal Express
Corporation ("FDX" or the "Term Assets Issuer") with the Trustee
in exchange for two classes of Receipts of Corporate Securities,
Series FDX 1991-1: the Amortizing Class Certificates and the
Residual Class Certificates (the Old Certificates constitute, and
the New Certificates, along with any Old Certificates, not
tendered in the Exchange Offer will constitute, the entire
Residual Class) (together the "Trust Certificates"). See "The
Term Assets Issuer" and "Description of the Term Assets".
The Corporate Trust Office of the Trustee is located at 101
Barclay Street, 12 East, New York, New York 10286, Attention:
Corporate Trust--Fred Acebedo and its number is (212)815-5728.
The Exchange Offer
The Exchange Offer........... New Certificates are being offered in
exchange for an equal Certificate
Principal Balance of Old Certificates.
As of the date hereof, there are Old
Certificates with an aggregate
Certificate Principal Balance of
$52,000,000 outstanding. Old
Certificates may be tendered only
in minimum denominations of
$500,000 and integral multiples of
$1,000 in excess thereof.
Registration Rights
Agreement.................... The Old Certificates were sold on August
28, 1997 to PSI. PSI placed the Old
Certificates with institutional
investors. In connection therewith,
the Company and PSI entered into
the Registration Rights Agreement,
providing, among other things, for
the Exchange Offer to occur. See
"The Exchange Offer".
Resale of New Certificates... Based on interpretations by the staff of
the Commission, as set forth in
no-action letters issued to third
parties, including the Exchange
Offer No-Action Letters, the
Company believes that the New
Certificates issued pursuant to the
Exchange Offer may be offered for
resale, resold or otherwise
transferred by holders thereof
(other than a broker-dealer who
acquires such New Certificates
directly from the Trust for resale
pursuant to Rule 144A under the
Securities Act or any other
available exemption under the
Securities Act or any holder that
is an "affiliate" of the Company as
defined under Rule 405 of the
Securities Act), without compliance
with the registration and
prospectus delivery provisions of
the Securities Act, provided that
such New Certificates are acquired
in the ordinary course of such
holders' business and such holders
are not engaged in, and do not
intend to engage in, a distribution
of such New Certificates and have
no arrangement with any person to
participate in a
4
<PAGE>
distribution of such New
Certificates. By tendering the Old
Certificates in exchange for New
Certificates, each holder, other
than a broker-dealer, will
represent to the Trust
that: (i) it is not an
affiliate of the Company (as
defined in Rule 405 under the
Securities Act) or a broker-dealer
tendering Old Certificates acquired
directly from the Company for its
own account; (ii) any New
Certificates to be received by it
were acquired in the ordinary
course of its business; and (iii)
it is not engaged in, and does not
intend to engage in, a distribution
of such New Certificates and has no
arrangement or understanding to
participate in a distribution of
the New Certificates. If a holder
of Old Certificates is engaged in
or intends to engage in a
distribution of the New
Certificates or has any arrangement
or understanding with respect to
the distribution of the New
Certificates to be acquired
pursuant to the Exchange Offer,
such holder may not rely on the
applicable interpretations of the
staff of the Commission and must
comply with the registration and
prospectus delivery requirements of
the Securities Act in connection
with any secondary resale
transaction. Each Restricted
Broker-Dealer that receives New
Certificates for its own account
pursuant to the Exchange Offer must
acknowledge that it will deliver a
prospectus in connection with any
resale of such New Certificates.
The Letter of Transmittal states
that by so acknowledging and by
delivering a prospectus, a
Restricted Broker-Dealer will
not be deemed to admit that it is
an "underwriter" within the meaning
of the Securities Act. This
Prospectus, as it may be amended or
supplemented from time to time, may
be used by a Restricted
Broker-Dealer in connection with
resales of New Certificates
received in exchange for Old
Certificates where such Old
Certificates were acquired by such
Restricted Broker-Dealer as a
result of market-making activities
or other trading activities. The
Company has agreed that it will
make this Prospectus available to
any Participating Broker-Dealer for
use in connection with any such
resale for one year. See "Plan of
Distribution". To comply with the
securities laws of certain
jurisdictions, it may be necessary
to qualify for sale or register the
New Certificates prior to offering
or selling such New Certificates.
The Company has agreed, pursuant to
the Registration Rights Agreement
and subject to certain specified
limitations therein, to cause the
registration or qualification of
the New Certificates for offer or
sale under the securities or "blue
sky" laws of such jurisdictions as
may be necessary to permit the
holders of New Certificates to
trade the New Certificates without
any restrictions or limitations
under the securities laws of the
several states of the United
States.
Consequences of Failure
to Exchange Old
Certificates................. Upon consummation of the Exchange Offer,
subject to certain exceptions,
holders of Old Certificates who do
not exchange their Old Certificates
for New Certificates in the
Exchange Offer will no longer be
entitled to registration rights and
will not be able to offer or sell
their Old Certificates, unless such
Old Certificates are subsequently
registered under the Securities Act
(which, subject to certain limited
exceptions, neither the Company nor
the Trust will
5
<PAGE>
have an obligation to do), except
pursuant to an exemption from, or
in a transaction not subject to,
the Securities Act and applicable
state securities laws. See "Risk
Factors--Risk Factors Relating to
the New Certificates and the
Exchange Offer--Consequences of
Failure to Exchange" and "The
Exchange Offer--Terms of the
Exchange Offer".
Expiration Date.............. 5:00 p.m., New York City time, on
[ ] (30 calendar days
following the commencement of the Exchange
Offer), unless the Exchange Offer is extended,
in which case the term "Expiration Date" means
the latest date and time to which the Exchange
Offer is extended.
Conditions to the Exchange
Offer.........................The Exchange Offer is not conditioned
upon any minimum principal amount of Old
Certificates being tendered for
exchange. However, the Exchange
Offer is subject to certain
customary conditions, which may be
waived by the Trust. See "The
Exchange Offer--Conditions". Except
for the requirements of applicable
federal and state securities laws,
there are no federal or state
regulatory requirements to be
complied with, or obtained by, the
Trust or the Company in connection
with the Exchange Offer.
Procedures for Tendering Old
Certificates..................Each holder of Old Certificates wishing
to accept the Exchange Offer must
complete, sign and date the Letter of
Transmittal, or a facsimile
thereof, in accordance with the
instructions contained herein and
therein, and mail or otherwise
deliver such Letter of Transmittal,
or such facsimile, together with
the Old Certificates to be
exchanged and any other required
documentation to the Exchange Agent
(as defined herein) at the address
set forth herein. See "The Exchange
Offer--Procedures for Tendering".
Guaranteed Delivery
Procedures....................Holders of Old Certificates who wish
to tender their Old Certificates
and whose Old Certificates are not
immediately available or who cannot
deliver their Old Certificates and
a properly completed Letter of
Transmittal or any other documents
required by the Letter of
Transmittal to the Exchange Agent
(as defined herein) prior to the
Expiration Date may tender their
Old Certificates according to the
guaranteed delivery procedures set
forth in "The Exchange
Offer--Guaranteed Delivery
Procedures".
Withdrawal Rights............ Tenders of Old Certificates may be withdrawn at
any time prior to 5:00 p.m., New York City time,
on the Expiration Date. To withdraw a tender of
Old Certificates, a written or facsimile
transmission notice of withdrawal must be
received by the Exchange Agent at its address
set forth herein under "The Exchange Offer--
Exchange Agent" prior to 5:00 p.m., New York
City time, on the Expiration Date.
6
<PAGE>
Acceptance of Old
Certificates and
Delivery of New Certificates..Subject to certain conditions, any and
all Old Certificates that are properly
tendered in the Exchange Offer
prior to 5:00 p.m., New York City
time, on the Expiration Date will
be accepted for exchange. The New
Certificates issued pursuant to the
Exchange Offer will be delivered
promptly following the Expiration
Date. See "The Exchange
Offer--Terms of the Exchange
Offer".
Certain Tax Considerations... The exchange of New Certificates for Old
Certificates should not be a sale or exchange
or otherwise a taxable event for Federal
income tax purposes. See "Certain U.S. Federal
Income Tax Consequences".
Exchange Agent............... The Bank of New York is serving as exchange agent
(the "Exchange Agent") in connection with the
Exchange Offer. The Bank of New York is also
the Trustee.
Fees and Expenses............ All expenses incident to the Trust's consummation
of the Exchange Offer and compliance with the
Registration Rights Agreement will be borne by
the Company. See "The Exchange Offer--Fees and
Expenses".
Use of Proceeds.............. There will be no cash proceeds payable to the
Trust or the Company from the issuance of the
New Certificates pursuant to the Exchange Offer.
The proceeds from the sale of the Old
Certificates were applied to the purchase of the
Term Assets and to pay issuance costs. See
"Use of Proceeds".
The New Certificates
The Exchange Offer relates to the exchange of up to
$52,000,000 aggregate Certificate Principal Balance of Old
Certificates for up to an equal aggregate Certificate Principal
Balance of New Certificates. The New Certificates will be
entitled to the benefits of the same Trust Agreement that governs
the Old Certificates and will govern the New Certificates. The
form and terms of the New Certificates are the same in all
material respects as the form and terms of the Old Certificates,
except that the New Certificates have been registered under the
Securities Act and therefore will not bear legends restricting
the transfer thereof. In addition, as a result of the rating
assigned to the New Certificates, the New Certificates will not
be subject to certain restrictions on transfer applicable to the
Old Certificates pursuant to Rule 3a-7 under the Investment
Company Act of 1940, as amended ("Rule 3a-7"). See "Description
of the New Certificates".
Trust Securities.......... The New Certificates (along with any
Old Certificates that are not
tendered in the Exchange Offer)
will constitute the "Residual Class
Certificates", one of two classes
of Trust Certificates, which collectively
represent the entire undivided
beneficial ownership of the Trust.
The Residual Class Certificates have
a $52,000,000 aggregate Certificate
Principal Balance. The other class
of Trust Certificates consists of
$52,000,000 aggregate Notional
Amount of Amortizing Class Certificates
(the "Amortizing Class Certificates").
Subject to the occurrence of a
Maturity Shortening Redemption
or an In-Kind Distribution,
distributions on the Amortizing
Class Certificates will be made
semiannually on each Distribution
Date (as defined below) up to and
including July 1, 2017 in an amount
equal to the amount of interest due
and received on the Term Assets on
such Distribution Date. [The Company
presently holds the Amortizing Class
Certificates.]
7
<PAGE>
Scheduled Distributions... Subject to the occurrence of a Maturity
Shortening Redemption (as defined
herein), no cash distributions will
be made on the New Certificates.
Instead, the New Certificates
outstanding on July 1, 2017 will be
terminated and deemed involuntarily
surrendered by the holders thereof
in exchange for a principal amount
of the Term Assets underlying such
New Certificates equal to the
aggregate Certificate Principal
Balance of such New Certificates.
No action by such holders will be
required to effect such termination
and the exchange will be carried
out in accordance with the Trust
Agreement.
Maturity Shortening
Redemption................ Upon the occurrence of a
Tax Event (as defined below) with
respect to the Term Assets, the
Term Assets Issuer has the right to
shorten the maturity of the Term
Assets to the extent required, in
the opinion of a nationally
recognized independent tax counsel,
such that, after the shortening of
the maturity, interest paid on the
Term Assets will be deductible by
it for federal income tax purposes.
(Any such new maturity date is
referred to herein as the
"Shortened Maturity Date.") If the
Shortened Maturity Date is on or
prior to July 1, 2017, the Residual
Class Certificates and the
Amortizing Class Certificates
will be redeemed on the Shortened
Maturity Date (a "Maturity
Shortening Redemption"). The
Trustee will distribute the payment
received on the Term Assets on the
Shortened Maturity Date to the
holders of the Residual Class
Certificates and the Amortizing
Class Certificates, respectively,
in the same ratio as (i) the
present value of all originally
scheduled future payments on the
Term Assets after July 1, 2017
bears to (ii) the present value of
all originally scheduled future
payments on the Amortizing Class
Certificates, discounted
semiannually in each case at a rate
of 7.60% per annum to the Shortened
Maturity Date. Such ratio will be
calculated by the Depositor, as
calculation agent (the "Calculation
Agent").
A "Tax Event" means that FDX has
received an opinion of a
nationally recognized independent
tax counsel experienced in such
matters to the effect that on or
after the date of issuance of the
Term Assets, as a result of (a) any
amendment to, clarification of, or
change (including any announced
prospective change) in laws, or any
regulations thereunder, of the
United States; (b) any judicial
decision, official administrative
pronouncement, ruling, regulatory
procedure, notice or announcement,
including any notice or
announcement of intent to adopt
such procedures or regulations (an
"Administrative Action"); or (c)
any amendment to, clarification of
or change in the official position
or the interpretation of such
Administrative Action or judicial
decision that differs from the
therefore generally accepted
position, in each case, on or after
the date of this issuance of the
Term Assets, such change in tax law
creates a more than insubstantial
risk that interest paid by FDX on
the Term Assets is not, or will not
be, deductible, in whole or in
part, by FDX for purposes of
federal income tax. See
"Description of the New
Certificates--Maturity Shortening
Redemption".
In-Kind Distribution...... Upon a Payment Default (as defined herein)
or an Acceleration (as defined herein) of
the Term Assets under the terms of the trust
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<PAGE>
indenture relating to the Term
Assets on or before July 1, 2017,
the Trustee will make an In-Kind
Distribution of the Term Assets to
the holders of the Trust
Certificates. Such distribution
will be made to the holders of the
Residual Class Certificates and the
Amortizing Class Certificates,
respectively, in the same ratio as
(i) the present value of all
originally scheduled future
payments on the Term Assets after
July 1, 2017 bears to (ii) the
present value of all originally
scheduled future payments on the
Amortizing Class Certificates,
discounted semiannually in each
case at a rate of 7.60% per annum
to the date of such Payment Default
or Acceleration. Such ratio will be
calculated by the Calculation
Agent. See "Description of New
Certificates--In-Kind
Distribution".
Restriction on Ownership.. Each registered holder of a New
Certificate will be required to
deliver to the Trustee a
certification upon purchase of the
New Certificate (which will be
included in the Letter of
Transmittal) to the effect that the
beneficial owner thereof (whether
such registered holder or the
ultimate beneficiary for whom it
holds such Certificate) is either
(i) a United States person, or (ii)
a non-United States person who is
exempt from withholding under U.S.
federal income tax laws and has
completed, accurately and in a
manner reasonably satisfactory to
the Trustee or its agent, an IRS
Form W-8 and delivered such Form
to the Trustee or its agent. Such
registered holder will be deemed to
have represented and agreed with
the Trustee that so long as it is
the registered holder of such New
Certificate, the beneficial owner
thereof will be a person described
in clauses (i) or (ii) above and,
in the event of any change in the
identity of the beneficial owner
for whom such registered holder is
acting or any lapse of a Form W-8
previously delivered to the
Trustee, it will promptly deliver a
new certification or a current Form
W-8, as applicable. In the event
such representation is untrue or
such current forms are not so
furnished, the New Certificate held
by such registered holder will be
subject to mandatory resale as
described herein. See "Description
of the New Certificates--
Limitations on Beneficial Ownership
of New Certificates" herein.
Record Dates.............. The fifth day immediately preceding each
Distribution Date.
Denominations............. The New Certificates will be denominated
and payable in U.S. dollars and will be
issued in definitive, fully-registered
form in minimum denominations of
$500,000 Certificate Principal
Balance and integral multiples of
$1,000 in excess thereof.
Federal Income Tax
Consequences.............. For U.S. federal income tax purposes,
the Trust will not be treated as
an association taxable as a
corporation (or a publicly traded
partnership treated as an
association). Although the
characterization of the Trust is
not certain, the Trust should be
treated for U.S. federal income tax
purposes as a grantor trust, and
the Trustee intends to report
income, gain, loss and deductions
to the Internal Revenue Service on
that basis. If the Trust were not
classified as a grantor trust, it
would be classified as a
partnership. In either event, the
Trust will not be subject to U.S.
federal income
9
<PAGE>
taxation.
Under the grantor trust
characterization, each holder of a
Certificate will be treated as
owning the rights to those payments
on the Term Assets that are
allocable to that New Certificate
and will be taxed under the
"stripped bond" rules of the
Internal Revenue Code of 1986.
Under those rules, a holder of a
New Certificate will be required to
include in ordinary gross income
original issue discount income
based on the holder's yield to
maturity for the New Certificate.
The exchange of New Certificates
for Old Certificates should not be
a sale or exchange or otherwise a
taxable event for Federal income
tax purposes. See "Certain U.S.
Federal Income Tax Consequences".
Ratings................... The New Certificates are rated "Baa2"
by Moody's Investors Services, Inc.
and [[ ] by [ ]]. A
security rating is not a recommendation
to buy, sell or hold securities and may
be subject to revision or withdrawal
at any time by the assigning rating
organization.
10
<PAGE>
RISK FACTORS
Prior to tendering Old Certificates in the Exchange Offer,
holders of Old Certificates should carefully review the
information contained and incorporated by reference in this
Prospectus and should particularly consider the following
matters.
Limited Obligations and Interests
The New Certificates will not represent an obligation of,
or interest in, the Company or any of its affiliates. The New
Certificates will not be insured or guaranteed by any government
agency or instrumentality, the Company, any Person affiliated
with the Company or the Trustee, or any other Person.
No Detailed Information About Term Assets or Term Assets Issuer
This Prospectus does not provide detailed information with
respect to the Term Assets or the Term Assets Issuer, any risk
factors relating thereto, or any rights or obligations, legal,
financial or otherwise, arising under or related to the Term
Assets. See "The Term Assets Issuer" and "Appendix
A--Identification of Term Assets" herein.
Events of Default
If an event of default on the Term Assets occurs, the risk
of loss with respect to the Term Assets lies entirely with the
holders of the Trust Certificates (the "Certificateholders"). If
a Payment Default or Acceleration (as such terms are defined
herein) occurs with respect to the Term Assets, the Trustee will
distribute the Term Assets to the Certificateholders in an
In-Kind Distribution (as defined herein). See "Description of the
New Certificates--Distribution of Term Assets on Payment Default
or Acceleration" herein.
Bankruptcy Risks
The New Certificates are payable solely from payments made
on the Term Assets by the Term Assets Issuer. The Term Assets
Issuer is subject to laws permitting bankruptcy, moratorium,
reorganization or other actions which, in the event of financial
difficulties of the Term Assets Issuer, could result in delays in
payment, partial payment or non-payment of the New Certificates
relating to a Term Asset. See "Description of the New
Certificates--Distribution of Term Assets on Payment Default or
Acceleration" herein.
[If PSGI, the parent of PSSA, were to become a debtor in
a bankruptcy case and a creditor or trustee-in-bankruptcy or PSGI
itself were to request a bankruptcy court to order that PSSA
be substantively consolidated with PSGI, delays in and reductions
in the amount of distributions on the New Certificates could
occur. PSGI and PSSA have taken certain steps that are
intended to minimize the risk that the assets of PSSA would
be substantively consolidated with the assets and liabilities of
PSGI. These steps include the creation of PSSA as a separate,
limited-purpose subsidiary, restrictions on the operations of
PSSA, and limitations in the certificate of incorporation of
PSSA on the nature of PSSA's business and its ability to
commence voluntary insolvency cases or proceedings without the
prior unanimous vote of all its directors. Further, PSSA does
not intend to file, and PSGI has agreed that it will not file, a
voluntary petition for relief under the Bankruptcy Code or any
similar applicable state laws with respect to PSSA.
The transfer of the Term Assets from PSI to PSSA
was intended and structured to constitute an absolute
sale of the Term Assets rather than a borrowing by PSI secured by
the Term Assets. If PSI were to become a debtor in a bankruptcy
case or a case under the Securities Investor Protection Act of
1970, as amended ("SIPA"), and a bankruptcy trustee, a court
which had issued a protective decree under SIPA or a creditor of
PSI were to take the position that the transfer of the Term
Assets from PSI to the PSSA should be characterized as
11
<PAGE>
the pledge of the Term Assets to secure a borrowing by PSI, then
delays in distributions on the New Certificates or (should the
bankruptcy court or the court in a case under SIPA rule in favor
of any such trustee or creditor) reductions in such distributions
could result. If the transfer of the Term Assets to PSSA
is treated as a sale, however, the Term Assets would not be part
of PSI's bankruptcy estate and would not be available to PSI's
creditors.]
Maturity and Redemption Considerations
The Residual Certificates are not scheduled to receive any
distributions before the in-kind distribution of Term Assets on
July 1, 2017. Potentially, the maturity and yield of the New
Certificates could be affected by (i) a cash distribution to
holders of the Trust Certificates upon a Shortened Maturity
Redemption or (ii) a distribution of Term Assets to such holders
upon an In-Kind Distribution. In the event of a cash distribution
on a Shortened Maturity Date, holders of Trust Certificates will
receive their respective share (determined pursuant to a formula
described in "Description of the New Certificates--Maturity
Shortening Redemption") of the redemption price (which price will
consist of principal and accrued and unpaid interest, without
premium); holders may then need to reinvest at the
then-prevailing market rates rather than receiving a bond on July
1, 2017 with a fixed-rate coupon of 7.60 percent with a remaining
term of eighty years. In the event of an In-Kind Distribution,
holders of New Certificates will receive their share of the Term
Assets (determined pursuant to a formula described in
"Description of the New Certificates--Distribution of Term Assets
on Payment Default or Acceleration") at the time of such
distribution, which amount will be less than the amount of Term
Assets that would be distributed as scheduled and which
distribution will occur prior to the scheduled distribution of
Term Assets on July 1, 2017.
Passive Nature of the Trust
The Trustee with respect to the Trust Certificates will hold
the Term Assets for the benefit of the Certificateholders. The
Trust will generally hold the Term Assets to maturity and not
dispose of them, regardless of adverse events, financial or
otherwise, which may affect any Term Assets Issuer or the value
of the Term Assets, except pursuant to an In-Kind Distribution to
Certificateholders in exchange for their Trust Certificates.
RISK FACTORS RELATING TO THE CERTIFICATES AND THE EXCHANGE OFFER
Consequences of Failure to Exchange
Holders of Old Certificates who do not exchange their Old
Certificates for New Certificates pursuant to the Exchange Offer
will continue to be subject to the restrictions on transfer of
such Old Certificates as set forth in the legend thereon as a
consequence of the issuance of the Old Certificates pursuant to
exemptions from, or in transactions not subject to, the
registration requirements of the Securities Act and applicable
state securities laws. In addition, the Old Certificates will
remain subject to the transfer restrictions described therein
pursuant to Rule 3a-7. In general, the Old Certificates may not
be offered or sold, unless registered under the Securities Act,
except pursuant to an exemption from, or in a transaction not
subject to, the Securities Act and applicable state securities
laws. The Company does not currently anticipate that it will
register the Old Certificates under the Securities Act. To the
extent that Old Certificates are tendered and accepted in the
Exchange Offer, the trading market for Old Certificates could be
adversely affected.
Absence of a Public Market for the New Certificates
Prior to the Exchange Offer, there has been no public
market for the New Certificates and it is uncertain whether such
a market will develop. Neither the Company nor the Trust intends
to apply for listing of the New Certificates on any securities
exchange or for quotation of the New Certificates on The Nasdaq
Stock Market's National Market or otherwise. The Trust has been
advised by PSI that it currently intends to make a market in the
New Certificates, as permitted by applicable laws and
regulations, after consummation of the Exchange Offer. PSI is not
obligated, however, to make a market in the New Certificates, and
any such market-making activity may be discontinued at any time
without notice at the sole discretion of PSI. There can be no
assurance as to the liquidity of
12
<PAGE>
the market for the New Certificates or that any active market for
the New Certificates will develop or continue. If an active
market does not develop or continue, the market price and
liquidity of the New Certificates may be adversely affected.
13
<PAGE>
USE OF PROCEEDS
There will be no cash proceeds payable to the Company or
the Trust from the issuance of the New Certificates pursuant to
the Exchange Offer. The Company sold the Old Certificates to PSI,
an affiliate of the Company, as initial purchaser. The proceeds
from the sale of the Old Certificates were received by the
Company and were applied to its purchase of the Term Assets,
which, after the purchase thereof, were deposited by the Company
in the Trust. The Company also paid issuance costs out of the
proceeds from the sale of Old Certificates. The Company obtained
an intercompany loan from PSGI to the extent the net proceeds
from the sale of the Old Certificates were insufficient to pay
the full purchase price of the Term Assets and issuance expenses.
FORMATION OF THE TRUST
Receipts on Corporate Securities Trust, Series FDX 1997-1
was formed under New York law pursuant to the Trust Agreement
dated as of August 28, 1997, as supplemented by the Series FDX
1997-1 Supplement dated as of such date. Concurrently with the
execution and delivery of the Trust Certificates, the Company
deposited the Term Assets with the Trustee. The Trustee, on
behalf of the Trust, accepted the Term Assets and delivered the
Trust Certificates to the Company. The Trustee is holding the
Term Assets for the benefit of the Certificateholders.
THE TERM ASSETS ISSUER
This Prospectus does not provide information with respect
to the Term Assets Issuer. No investigation has been made of the
financial condition or creditworthiness of the Term Assets Issuer
or any of its subsidiaries in connection with the issuance of the
New Certificates. The Company is not an affiliate of the Term
Assets Issuer.
The Term Assets Issuer is presently subject to the
informational requirements of the Exchange Act, and in accordance
therewith files reports and other information (including
financial information) with the Commission. Copies of such
reports and other information may be inspected and copied at the
public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549; Seven
World Trade Center, Suite 1300, New York, New York 10048; and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and may be obtained from the Public
Reference Section of the Commission at Washington, D.C. 20549, at
prescribed rates. The Commission maintains a Web site at
http://www.sec.gov containing reports, proxy statements and other
information regarding registrants that file electronically with
the Commission. In addition, such reports and other information
can be obtained from the Term Assets Issuer at its address
specified in its most recent publicly available reports.
If the Term Assets Issuer ceases to be a reporting company
under the Exchange Act, information regarding the Term Assets
will be limited to that received by the Trustee, as a registered
holder of the Term Assets, from the Term Assets Trustee as
required by the Term Assets Indenture.
The Trust will have no assets other than the Term Assets
from which to make distributions of amounts due in respect of the
Trust Certificates, which include the New Certificates.
Consequently, the ability of Certificateholders to receive
distributions in respect of the New Certificates will depend on
the Trust's receipt of payments on the Term Assets from the Term
Assets Issuer.
Prospective purchasers of the New Certificates should
consider carefully the Term Assets Issuer's financial condition
and its ability to make payments in respect of such Term Assets.
This Prospectus relates only to the New Certificates being
offered hereby and does not relate to the Term Assets or the Term
Assets Issuer. All information contained in this Prospectus
regarding the Term Assets Issuer is derived from the prospectus
used in the sale of the Term Assets (the "Term Assets
Prospectus"). Neither the Company nor the Trust has participated
in the preparation of such documents, or takes any responsibility
for the accuracy or completeness of the information provided
therein. See "Appendix A-Identification of Term Assets".
DESCRIPTION OF THE TERM ASSETS
The assets of the Trust consist solely of $52,000,000
aggregate principal amount of 7.60% Notes due July 1, 2097 issued
by the Term Assets Issuer and having the characteristics described
in the Term Assets Prospectus. The Term Assets were originally
issued by the Term Assets Issuer as part of an underwritten
public offering of $250,000,000 aggregate principal amount of
such securities, pursuant to a registration statement on Form S-3
(File No. 333-07691) (together with all amendments and exhibits
thereto, the "Term Assets Registration Statement"),
14
<PAGE>
filed by the Term Assets Issuer with the Commission under the
Securities Act. Payments of interest are required to be made on
the Term Assets semiannually on the first day of each January and
July, commencing January 1, 1998, or if such day is not a
business day, on the next succeeding business day.
The Term Assets deposited in the Trust represent the sole
assets of the Trust that are available to make distributions in
respect of the Trust Certificates, including the New
Certificates. Consequently, the ability of holders of New
Certificates to receive cash distributions in respect of the New
Certificates in the event of a Maturity Shortened Redemption will
depend on the Trust's receipt of payments on, or in respect of,
the Term Assets.
The disclosure under this caption is intended primarily to
identify the Term Assets and does not purport to summarize the
Term Assets or to provide information with respect to the Term
Assets Issuer. Appendix A to this Prospectus, which contains
certain terms of the Term Assets, is derived solely from the
description thereof in the Term Assets Prospectus. Such
information does not purport to be complete and is qualified in
its entirety by, and should be read in conjunction with (i) the
Term Assets Prospectus, and (ii) the Term Assets Registration
Statement, of which the Term Assets Prospectus is a part. This
Prospectus relates only to New Certificates offered hereby and
does not relate to an offering of the Term Assets. No
representation is made by the Trust, the Trustee or the Company
as to the accuracy or completeness of the information contained
in the Term Assets Prospectus or the Term Assets Registration
Statement.
Ratings
The Term Assets have been rated "Baa2" and "BBB" by Moody's
Investors Service, Inc. ("Moody's") and Standard & Poor's Rating
Services ("Standard & Poor's"), respectively. Any rating of the
Term Assets is not a recommendation to purchase, hold or sell
such Term Assets or the New Certificates, and there can be no
assurance that a rating will remain for any given period of time
or that a rating will not be revised or withdrawn entirely by a
rating agency if in its judgment circumstances in the future so
warrant.
The New Certificates are rated "Baa2" by Moody's [and [ ]
by [ ]].
PSI and the Term Assets Issuer
From time to time, PSI may be engaged by the Term Assets
Issuer as an underwriter or placement agent, in an advisory
capacity or in other business arrangements. In addition, PSI or
another affiliate of the Company may make a market in other
outstanding securities of the Term Assets Issuer.
THE EXCHANGE OFFER
The summary herein of certain provisions of the
Registration Rights Agreement does not purport to be complete and
reference is made to the provisions of the Registration Rights
Agreement, filed as an exhibit to the Registration Statement of
which this Prospectus is a part.
Terms of the Exchange Offer
In connection with the sale of the Old Certificates pursuant
to a Purchase Agreement dated as of August 25, 1997, between the
Company and PSI, their respective assignees became entitled to
the benefits of the Registration Rights Agreement incorporated by
reference hereto as described under "Incorporation of Certain
Documents by Reference".
Under the Registration Rights Agreement, except in certain
circumstances, the Company is obligated to use its best efforts
to (i) file a Registration Statement (the "Exchange Offer
Registration Statement"), of which this Prospectus is a part, for
a registered exchange offer with respect to an issue of New
Certificates identical in all material respects to the Old
Certificates within 60 calendar days after August 28, 1997, the
date the Old Certificates were issued, (ii) cause the
Registration Statement to become effective at the earliest
possible time, (iii) in connection with the foregoing, (A) file
all pre-effective amendments to such Exchange Offer Registration
Statement as may be necessary in order to cause such Exchange
Offer Registration Statement to become effective, (B) file, if
applicable, a post-effective amendment to such Exchange Offer
Registration Statement pursuant to Rule 430A under the Act
15
<PAGE>
and (C) cause all necessary filings, if any, in connection with
the registration and qualification of the Exchange Certificates
to be made under the Blue Sky laws of such jurisdictions as are
necessary to permit consummation of the Exchange Offer and (iv)
promptly after the effectiveness of such Exchange Offer
Registration Statement, commence and consummate the Exchange
Offer. The Trust will keep the Exchange Offer open for a period
of not less than 30 calendar days and not more than 45 days after
the date notice of the Exchange Offer is mailed to Holders. The
Exchange Offer being made hereby, if commenced and consummated
within the time periods described in this paragraph, will satisfy
those requirements under the Registration Rights Agreement.
Upon the terms and subject to the conditions set forth in
this Prospectus and in the Letter of Transmittal (which together
constitute the Exchange Offer), all Old Certificates validly
tendered and not withdrawn prior to 5:00 p.m., New York City
time, on the Expiration Date will be accepted for exchange. New
Certificates of the same class will be issued in exchange for an
equal principal amount of outstanding Old Certificates accepted
in the Exchange Offer. Old Certificates may be tendered only in
minimum denominations of $500,000 Certificate Principal Balance
and integral multiples of $1,000 in excess thereof. This
Prospectus, together with the Letter of Transmittal, is being
sent to all registered holders as of [ ], 1997. The Exchange
Offer is not conditioned upon any minimum principal amount of Old
Certificates being tendered in exchange. However, the obligation
to accept Old Certificates for exchange pursuant to the Exchange
Offer is subject to certain conditions as set forth herein under
"--Conditions".
Old Certificates shall be deemed to have been accepted as
validly tendered when, as and if the Trustee has given oral or
written notice thereof to the Exchange Agent. The Exchange Agent
will act as agent for the tendering holders of Old Certificates
for the purposes of receiving the New Certificates and delivering
New Certificates to such holders.
Based on interpretations by the staff of the Commission, as
set forth in no-action letters issued to third parties, including
the Exchange Offer No-Action Letters, the Company believes that
the New Certificates issued pursuant to the Exchange Offer may be
offered for resale, resold or otherwise transferred by holders
thereof (other than a broker-dealer who acquires such New
Certificates directly from the Company for resale pursuant to
Rule 144A under the Securities Act or any other available
exemption under the Securities Act or any holder that is an
"affiliate" of the Company as defined in Rule 405 under the
Securities Act), without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided
that such New Certificates are acquired in the ordinary course of
such holders' business and such holders are not engaged in, and
do not intend to engage in, a distribution of such New
Certificates and have no arrangement with any person to
participate in a distribution of such New Certificates. By
tendering the Old Certificates in exchange for New Certificates,
each holder, other than a broker-dealer, will represent to the
Trust that (i) it is not an affiliate of the Company (as defined
in Rule 405 under the Securities Act) or a broker-dealer
tendering Old Certificates acquired directly from the Trust or
the Company for its own account; (ii) any New Certificates to be
received by it will be acquired in the ordinary course of its
business; and (iii) it is not engaged in, and does not intend to
engage in, a distribution of such New Certificates and has no
arrangement or understanding to participate in a distribution of
the New Certificates. If a holder of Old Certificates is engaged
in or intends to engage in a distribution of the New Certificates
or has any arrangement or understanding with respect to the
distribution of the New Certificates to be acquired pursuant to
the Exchange Offer, such holder may not rely on the applicable
interpretations of the staff of the Commission and must comply
with the registration and prospectus delivery requirements of the
Securities Act in connection with any secondary resale
transaction. Each Broker-Dealer that receives New Certificates
for its own account ("Restricted Broker-Dealer") pursuant to the
Exchange Offer must acknowledge that it will deliver a prospectus
in connection with any resale of such New Certificates. The
Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a Restricted Broker-Dealer will not be
deemed to admit that it is an "underwriter" within the meaning of
the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a Restricted
Broker-Dealer in connection with resales of New Certificates
received in exchange for Old Certificates where such Old
Certificates were acquired by such Restricted Broker-Dealer as a
result of market-making activities or other trading activities.
The Company has agreed that for a period of one year it will
cause this Prospectus to be made available to any Restricted
Broker-Dealer for use in connection with any such resale. See
"Plan of Distribution".
16
<PAGE>
If (i) the Company is not required to file an Exchange Offer
Registration Statement with respect to the New Certificates
because the Exchange Offer is not permitted by applicable law or
(ii) if any holder of Old Certificates shall notify the Company
within 20 Business Days following the consummation of the
Exchange Offer that (A) such holder was prohibited by law or
Commission policy from participating in the Exchange Offer or (B)
such holder may not resell the Exchange Certificates acquired by
it in the Exchange Offer to the public without delivering a
prospectus and the prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such
resales by such holder or (C) such holder is a Broker-Dealer and
holds Old Certificates acquired directly from any of the Trust
or the Company or one of their respective Affiliates, then the
Company shall (x) cause to be filed, on or prior to 60 days after
the date on which the Company determines that it is not required
to file the Exchange Offer Registration Statement pursuant to
clause (i) above, or 60 days after the date on which the Company
receives the notice specified in clause (ii) above, a shelf
registration statement pursuant to Rule 415 under the Securities
Act (which may be an amendment to the Exchange Offer Registration
Statement (in either event, the "Shelf Registration Statement")
relating to all Old Certificates the holders of which shall have
provided the information required by the Registration Rights
Agreement, and shall (y) use its best efforts to cause such Shelf
Registration Statement to become effective within 90 days after
the date on which the Company becomes obligated to file such
Shelf Registration Statement. The Company shall use its best
efforts to keep the Shelf Registration Statement continuously
effective, supplemented and amended to the extent necessary to
ensure that it is available for sales of Old Certificates by the
holders thereof entitled to the benefit of the Shelf Registration
Statement, and to ensure that it conforms with the requirements
of the Registration Rights Agreement, the Securities Act and the
policies, rules and regulations of the Commission as announced
from time to time, for a period of not more than one year
following the date on which such Shelf Registration Statement
first becomes effective under the Securities Act or such shorter
period that will terminate when all the Old Certificates covered
by the Shelf Registration Statement have been sold pursuant to
the Shelf Registration Statement.
Upon consummation of the Exchange Offer, subject to certain
exceptions, holders of Old Certificates who do not exchange their
Old Certificates for New Certificates in the Exchange Offer will
no longer be entitled to registration rights and will not be able
to offer or sell their Old Certificates, unless such Old
Certificates are subsequently registered under the Securities Act
(which, subject to certain limited exceptions, the Company will
have no obligation to do), except pursuant to an exemption from,
or in a transaction not subject to, the Securities Act and
applicable state securities laws. See "Risk Factors--Risk Factors
Relating to the New Certificates and the Exchange Offer".
NEITHER THE COMPANY NOR THE TRUSTEE MAKES ANY RECOMMENDATION
TO HOLDERS OF OLD CERTIFICATES AS TO WHETHER TO TENDER OR REFRAIN
FROM TENDERING ALL OR ANY PORTION OF THEIR OLD CERTIFICATES
PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO ONE HAS BEEN
AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD
CERTIFICATES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER
PURSUANT TO THE EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT
OF OLD CERTIFICATES TO TENDER AFTER READING THIS PROSPECTUS AND
THE LETTER OF TRANSMITTAL AND CONSULTING WITH THEIR ADVISERS, IF
ANY, BASED ON THEIR OWN FINANCIAL POSITION AND REQUIREMENTS.
Expiration Date; Extensions; Amendments; Termination
The term "Expiration Date" shall mean 5:00 p.m., New York
City time, on [ ] (30 calendar days following the commencement of
the Exchange Offer), unless the Company, in its sole discretion,
instructs the Exchange Agent to extend the Exchange Offer, in
which case the term "Expiration Date" shall mean the latest date
to which the Exchange Offer is extended.
In order to extend the Expiration Date, the Company will
notify the Exchange Agent of any extension by oral or written
notice and will cause the Exchange Agent to notify the holders of
the Old Certificates by means of a press release or other public
announcement prior to 9:00 A.M., New York City time, on the next
business day after the previously scheduled Expiration Date. Such
announcement may state that the Trust is extending the Exchange
Offer for a specified period of time.
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The Company reserves the right to cause the Trust and the
Exchange Agent (i) to delay acceptance of any Old Certificates,
to extend the Exchange Offer or to terminate the Exchange Offer
and not permit acceptance of Old Certificates not previously
accepted if any of the conditions set forth herein under "--
Conditions" shall have occurred and shall not have been waived by
the Company, by giving oral or written notice of such delay,
extension or termination to the Exchange Agent, or (ii) to cause
the Trustee to amend the terms of the Exchange Offer in any
manner deemed by it to be advantageous to the holders of the Old
Certificates. Any such delay in acceptance, extension,
termination or amendment will be followed as promptly as
practicable by oral or written notice thereof to the Exchange
Agent. If the Exchange Offer is amended in a manner determined by
the Company to constitute a material change, the Company will
promptly cause such amendment to be disclosed in a manner reasonably
calculated to inform the holders of the Old Certificates of such
amendment.
Without limiting the manner in which the Exchange Agent may
choose to make public announcement of any delay, extension,
amendment or termination of the Exchange Offer, the Exchange
Agent shall have no obligation to publish, advertise, or
otherwise communicate any such public announcement, other than by
making a timely release to an appropriate news agency.
Procedures for Tendering
To tender in the Exchange Offer, a holder must complete,
sign and date the Letter of Transmittal, or a facsimile thereof,
have the signatures thereon guaranteed if required by the Letter
of Transmittal, and mail or otherwise deliver such Letter of
Transmittal or such facsimile, together with any other required
documents, to the Exchange Agent prior to 5:00 p.m., New York
City time, on the Expiration Date. In addition, (A) either (i)
certificates for such Old Certificates must be received by the
Exchange Agent along with the Letter of Transmittal or (ii) the
holder must comply with the guaranteed delivery procedures
described below, and (B) a certification to the effect that the
beneficial owner thereof (whether such registered holder or the
ultimate beneficiary for whom it holds such Old Certificate(s))
is either (i) a United States person, or (ii) a non-United States
person who is exempt from withholding under U.S. federal income
tax laws and has completed, accurately and in a manner reasonably
satisfactory to the Trustee or its agent, an IRS Form W-8 and
delivered such Form to the Trustee or its agent unless such
certificate has already been provided to the Trustee in
connection with the purchase of the Old Certificate(s) being
tendered and the status of the beneficial owner has not changed.
THE METHOD OF DELIVERY OF OLD CERTIFICATES, LETTERS OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION
AND RISK OF THE HOLDERS. IF SUCH DELIVERY IS BY MAIL, IT IS
RECOMMENDED THAT REGISTERED MAIL, PROPERLY INSURED, WITH RETURN
RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIME SHOULD
BE ALLOWED TO ASSURE TIMELY DELIVERY. NO LETTERS OF TRANSMITTAL
OR OLD CERTIFICATES SHOULD BE SENT TO THE COMPANY. Delivery of
all documents must be made to the Exchange Agent at its address
set forth below. Holders may also request their respective
brokers, dealers, commercial banks, trust companies or nominees
to effect such tender for such holders.
The tender by a holder of Old Certificates will constitute
an agreement between such holder and the Trust in accordance with
the terms and subject to the conditions set forth herein and in
the Letter of Transmittal.
Only a holder of Old Certificates may tender such Old
Certificates in the Exchange Offer. The term "holder" with
respect to the Exchange Offer means any person in whose name Old
Certificates are registered on the books of the Trustee or any
other person who has obtained a properly completed bond power
from the registered holder.
Any beneficial owner whose Old Certificates are registered
in the name of a broker, dealer, commercial bank, trust company
or other nominee and who wishes to tender should contact such
registered holder promptly and instruct such registered holder to
tender on his behalf. If such beneficial owner wishes to tender
on his own behalf, such beneficial owner must, prior to
completing and executing the Letter of Transmittal and delivering
his Old Certificates, either make appropriate arrangements to
register ownership of the Old Certificates in such owner's name
or obtain a properly completed bond power from the registered
holder. The transfer of registered ownership may take
considerable time.
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Signatures on a Letter of Transmittal or a notice of
withdrawal, as the case may be, must be guaranteed by any member
firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc., a commercial
bank or trust company having an office or correspondent in the
United States or an "eligible guarantor" institution within the
meaning of Rule 17Ad-15 under the Exchange Act (each an "Eligible
Institution") unless the Old Certificates tendered pursuant
thereto are tendered (i) by a registered holder who has not
completed the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" on the Letter of Transmittal or
(ii) for the account of an Eligible Institution.
If the Letter of Transmittal is signed by a person other
than the registered holder of any Old Certificates listed
therein, such Old Certificates must be endorsed or accompanied by
bond powers and a proxy which authorizes such person to tender
the Old Certificates on behalf of the registered holder, in each
case as the name of the registered holder or holders appears on
the Old Certificates.
If the Letter of Transmittal or any Old Certificates or
bond powers are signed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, such persons
should so indicate when signing, and unless waived by the
Trustee, evidence satisfactory to the Trustee of their authority
to so act must be submitted with the Letter of Transmittal.
All questions as to the validity, form, eligibility
(including time of receipt) and withdrawal of the tendered Old
Certificates will be determined by the Trustee in its sole
discretion, which determination will be final and binding. The
Trustee reserves the absolute right to reject any and all Old
Certificates not properly tendered or any Old Certificates which,
if accepted, would, in the opinion of counsel for the Company, be
unlawful. The Trustee also reserves the absolute right to waive
any irregularities or conditions of tender as to particular Old
Certificates. The Trustee's interpretation of the terms and
conditions of the Exchange Offer (including the instructions in
the Letter of Transmittal) will be final and binding on all
parties. Unless waived, any defects or irregularities in
connection with tenders of Old Certificates must be cured within
such time as the Trustee shall determine. Neither the Trustee nor
the Company, nor the Exchange Agent nor any other person shall be
under any duty to give notification of defects or irregularities
with respect to tenders of Old Certificates, nor shall any of
them incur any liability for failure to give such notification.
Tenders of Old Certificates will not be deemed to have been made
until such irregularities have been cured or waived. Any Old
Certificates received by the Exchange Agent that are not properly
tendered and as to which the defects or irregularities have not
been cured or waived will be returned without cost to such holder
by the Exchange Agent to the tendering holders of Old
Certificates, unless otherwise provided in the Letter of
Transmittal, as soon as practicable following the Expiration
Date.
In addition, the Company reserves the right in its sole
discretion (i) to purchase or make offers for any Old
Certificates that remain outstanding subsequent to the Expiration
Date or, as set forth under "-- Conditions", to terminate the
Exchange Offer in accordance with the terms of the Registration
Rights Agreement and (ii) to the extent permitted by applicable
law, to purchase Old Certificates in the open market, in
privately negotiated transactions or otherwise. The terms of any
such purchases or offers could differ from the terms of the
Exchange Offer.
Acceptance of Old Certificates for Exchange; Delivery of New
Certificates
Upon satisfaction or waiver of all of the conditions to the
Exchange Offer, all Old Certificates properly tendered will be
accepted, promptly after the Expiration Date, and the New
Certificates will be issued promptly after acceptance of the Old
Certificates. For purposes of the Exchange Offer, Old
Certificates shall be deemed to have been accepted as validly
tendered for exchange when, as and if the Trustee has given oral
or written notice thereof to the Exchange Agent.
In all cases, issuance of New Certificates for Old
Certificates that are accepted for exchange pursuant to the
Exchange Offer will be made only after timely receipt by the
Exchange Agent of certificates for such Old Certificates, a
properly completed and duly executed Letter of Transmittal and
all other required documents. If any tendered Old Certificates
are not accepted for any reason set forth in the terms and
conditions of the Exchange Offer or if Old Certificates are
submitted for a greater principal amount than the holder desires
to exchange, such
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unaccepted or nonexchanged Old Certificates will be returned
without expense to the tendering holder thereof as promptly as
practicable after the expiration or termination of the Exchange
Offer.
Guaranteed Delivery Procedures
If a registered holder of the Old Certificates desires to
tender such Old Certificates, and the Old Certificates are not
immediately available, or time will not permit such holder's Old
Certificates or other required documents to reach the Exchange
Agent before the Expiration Date, a tender may be effected if (i)
the tender is made through an Eligible Institution, (ii) prior to
the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed
Letter of Transmittal (or a facsimile thereof) and Notice of
Guaranteed Delivery, substantially in the form provided by the
Company (by facsimile transmission, mail or hand delivery),
setting forth the name and address of the holder of Old
Certificates and the amount of Old Certificates tendered, stating
that the tender is being made thereby and guaranteeing that
within three New York Stock Exchange (the "NYSE") trading days after
the date of execution of the Notice of Guaranteed Delivery, the
certificates for all physically tendered Old Certificates, in
proper form for transfer, and any other documents required by the
Letter of Transmittal will be deposited by the Eligible
Institution with the Exchange Agent and (iii) the certificates
for all physically tendered Old Certificates, in proper form for
transfer, and all other documents required by the Letter of
Transmittal are received by the Exchange Agent within three NYSE
trading days after the date of execution of the Notice of
Guaranteed Delivery.
Withdrawal of Tenders
Tenders of Old Certificates may be withdrawn at any time
prior to 5:00 p.m., New York City time on the Expiration Date.
For a withdrawal to be effective, a written notice of
withdrawal must be received by the Exchange Agent prior to 5:00
p.m., New York City time on the Expiration Date at one of the
addresses set forth below under "-- Exchange Agent". Any such
notice of withdrawal must specify the name of the person having
tendered the Old Certificates to be withdrawn, identify the Old
Certificates to be withdrawn (including the principal amount of
such Old Certificates) and (where certificates for Old
Certificates have been transmitted) specify the name in which
such Old Certificates are registered, if different from that of
the withdrawing holder. If certificates for Old Certificates have
been delivered or otherwise identified to the Exchange Agent,
then, prior to the release of such certificates, the withdrawing
holder must also submit the serial numbers of the particular
certificates to be withdrawn and a signed notice of withdrawal
with signatures guaranteed by an Eligible Institution unless such
holder is an Eligible Institution. All questions as to the
validity, form and eligibility (including time of receipt) of
such notices will be determined by the Trustee, whose
determination shall be final and binding on all parties. Any Old
Certificates so withdrawn will be deemed not to have been validly
tendered for exchange for purposes of the Exchange Offer. Any Old
Certificates which have been tendered for exchange but which are
not exchanged for any reason will be returned to the holder
thereof without cost to such holder as soon as practicable after
withdrawal, rejection of tender or termination of the Exchange
Offer. Properly withdrawn Old Certificates may be retendered by
following one of the procedures described under "-- Procedures
for Tendering" above at any time on or prior to the Expiration
Date.
Conditions
Notwithstanding any other term of the Exchange Offer, Old
Certificates will not be required to be accepted for exchange,
nor will New Certificates be issued in exchange for any Old
Certificates, and the Company may cause the Trustee to terminate
or amend the Exchange Offer as provided herein before the
acceptance of such Old Certificates, if because of any change in
law, or applicable interpretations thereof by the Commission, the
Company determines that the Trust is not permitted to effect the
Exchange Offer. The Company has no obligation to, and will not
knowingly, permit acceptance of tenders of Old Certificates by
the Trust from affiliates of the Company (within the meaning of
Rule 405 under the Securities Act) or from any other holder or
holders who are not eligible to participate in the Exchange Offer
under applicable law or interpretations thereof by the
Commission, or if the New Certificates to be received by such
holder or holders of Old Certificates in the Exchange Offer, upon
receipt, will
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not be tradable by such holder without restriction under the
Securities Act and the Exchange Act and without material
restrictions under the "blue sky" or securities laws of
substantially all of the states of the United States.
Exchange Agent
The Bank of New York has been appointed as Exchange Agent
for the Exchange Offer. Questions and requests for assistance and
requests for additional copies of this Prospectus or of the
Letter of Transmittal should be directed to the Exchange Agent
addressed as follows:
By Mail: By Hand:
The Bank of New York The Bank of New York
101 Barclay Street, 12 East 101 Barclay Street, 12 East
New York, N.Y. 10286 New York, N.Y. 10286
Attention: Corporate Trust-- Attention: Corporate Trust--
Fred Acebedo Fred Acebedo
Telephone: (212) 815-5728
Facsimile: (212) 815-7157
Fees and Expenses
The expenses of soliciting tenders pursuant to the Exchange
Offer will be borne by the Company on behalf of the Trust
pursuant to the Registration Rights Agreement. The principal
solicitation for tenders pursuant to the Exchange Offer is being
made by mail; however, additional solicitations may be made by
telegraph, telephone, telecopy or in person by officers and
regular employees or agents of the Company on behalf of the
Trust.
The Company will not make any payments to brokers, dealers
or other persons soliciting acceptances of the Exchange Offer.
The Company, however, will pay on behalf of the Trust the
Exchange Agent's reasonable and customary fees for its services
and will reimburse the Exchange Agent for its reasonable
out-of-pocket expenses in connection therewith. The Company may
also pay on behalf of the Trust, the reasonable out-of-pocket
expenses incurred by brokerage houses and other custodians,
nominees and fiduciaries in forwarding copies of the Prospectus
and related documents to the beneficial owners of the Old
Certificates, and in handling or forwarding tenders for exchange.
The expenses to be incurred in connection with the Exchange
Offer will be paid by the Company on behalf of the Trust,
including fees and expenses of the Exchange Agent and Trustee and
accounting, legal, printing and related fees and expenses.
The Company will pay all transfer taxes, if any, applicable
to the exchange of Old Certificates pursuant to the Exchange
Offer. If, however, certificates representing New Certificates or
Old Certificates for principal amounts not tendered or accepted
for exchange are to be delivered to, or are to be registered or
issued in the name of, any person other than the registered
holder of the Old Certificates tendered, or if tendered Old
Certificates are registered in the name of any person other than
the person signing the Letter of Transmittal, or if a transfer
tax is imposed for any reason other than the exchange of Old
Certificates pursuant to the Exchange Offer, then the amount of
any such transfer taxes (whether imposed on the registered holder
or any other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted with the Letter of Transmittal, the
amount of such transfer taxes will be billed directly to such
tendering holder.
DESCRIPTION OF THE NEW CERTIFICATES
General
The New Certificates will be denominated and distributions
with respect thereto will be payable in United States Dollars.
The Trust Certificates, which include the New Certificates,
represent in the aggregate the entire beneficial ownership
interest in the Trust. The property of the Trust will consist of
(i) the Term Assets, (ii) all
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payments on or collections in respect of the Term Assets received
on or after August 28, 1997, together with any proceeds thereof,
and (iii) all funds from time to time deposited with the Trustee
in accounts related to the Trust. The property of the Trust will
be held for the benefit of the Certificateholders by the Trustee.
Certificateholders of the applicable class will receive payments
on each Distribution Date as described herein. See "--Collections
and Distributions."
The Trust Certificates represent two classes of undivided
fractional beneficial interests in the assets of the Trust, and
all distributions to Certificateholders will be made only from
the property of the Trust as described herein. The Trust
Certificates are comprised of two classes representing the entire
undivided beneficial ownership of the Trust: the Amortizing Class
and the Residual Class (comprised of the New Certificates and any
Old Certificates not tendered in the Exchange Offer). The other
class of certificates are $52,000,000 aggregate notional amount
of Amortizing Class Certificates. Subject to the occurrence of a
Maturity Shortening Redemption or an In-Kind Distribution,
distributions on the Amortizing Class Certificates will be made
semiannually on each Distribution Date (as defined below) up to
and including July 1, 2017 in an amount equal to the amount of
interest due and received on the Term Assets on such Distribution
Date. The Trust Certificates do not represent an interest in or
obligation of the Company, the Term Assets Issuer, the Term
Assets Trustee or the Trustee or any affiliate of any of the
foregoing.
Subject to the occurrence of a Maturity Shortening
Redemption or an In-Kind Distribution (each as defined herein),
the Residual Class Certificates evidence fractional undivided
beneficial interests in all principal payments on the Term
Assets, and in interest accrued and paid on the Term Assets after
July 1, 2017 at a rate of 7.60% per annum.
The aggregate "Certificate Principal Balance" of the
Residual Class Certificates on any determination date will equal
the aggregate principal amount of the Term Assets in the Trust as
of such date. The Certificate Principal Balance of any Residual
Class Certificate will represent a pro rata portion of the
then-current aggregate Certificate Principal Balance of all
outstanding Residual Class Certificates, which equals the
principal amount of Term Assets that the holder of such Residual
Class Certificate is entitled to receive as an in-kind
distribution on July 1, 2017.
New Certificates may be transferred or exchanged for like
Certificates of the same Class at the corporate trust office or
agency of the Trustee in the City and State of New York, subject
to the limitations provided in the Trust Agreement, without the
payment of any service charge, other than any tax or governmental
charge payable in connection therewith. The Company may at any
time purchase Trust Certificates at any price in the open market
or otherwise. Trust Certificates so purchased by the Company may,
at the discretion of the Company, be held or resold or
surrendered to the Trustee for cancellation of such Trust
Certificates or exchange for newly-created classes of Trust
Certificates. See "--Company Exchange" below.
Form of the Certificates
The New Certificates will be issued in definitive
registered form in minimum denominations of $500,000 Certificate
Principal Balance and integral multiples of $1,000 in excess
thereof.
Collections and Distributions
Subject to the occurrence of a Maturity Shortening
Redemption, no cash distributions will be made on the Residual
Class Certificates. Instead, the Residual Class Certificates
outstanding on July 1, 2017 will be terminated and deemed
involuntarily surrendered by the holders thereof in exchange for
a principal amount of the Term Assets underlying the Residual
Class Certificates equal to the aggregate Certificate Principal
Balance of the Residual Class Certificates. No action by such
holders will be required to effect such termination, and the
exchange will be carried out in accordance with the Trust
Agreement.
Distributions with respect to New Certificates will be made
at the corporate trust office or agency of the Trustee in The
City of New York
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Any cash distribution on the New Certificates, upon a
liquidation of the Trust as described below, will be made (i) in
U.S. Dollars by or on behalf of the Trustee on the date of the
distribution and (ii) by check drawn on, or wire transfer, of
immediately available funds, but, with respect to the latter,
only if appropriate wire transfer instructions have been received
in writing by the Trustee not later than fifteen calendar days
prior to the date of the distribution. If a holder of New
Certificates wishes to receive cash payments by wire transfer,
such holder shall provide appropriate wire transfer instructions
by delivery of a written notice to the Trustee not later than
fifteen calendar days prior to the date of the distribution,
which will remain in effect until revoked by written notice to
such Trustee received not later than fifteen calendar days prior
to the date of the distribution. Any cash distribution by the
Trustee to the New Certificates shall be made, subject to timely
receipt of payments on the Term Assets and solely to the extent
of Available Funds. See "--Maturity Shortening Redemption."
"Available Funds" means, as of any date of the distribution, the
aggregate amount received on or with respect to the Term Assets
during the period from the preceding date of the distribution up
to and including such date of the distribution (each such period,
a "Collection Period"), and deposited in the Collection Account
and available for distribution on such date of the distribution.
If a payment with respect to the Term Assets is made to the
Trustee after the date on which such payment was due, the Trustee
will distribute any such amounts received on the Business Day
thereafter as if such funds had constituted Available Funds on
the date of the distribution immediately preceding such Business
Day; provided, however, that the Record Date for such
distribution shall be fifteen days prior to such Business Day and
no additional amounts will accrue on the Trust Certificates or be
owed to Certificateholders in respect of such distribution.
All amounts received on or with respect to the Term Assets
shall be held uninvested by the Trustee. On July 1, 2017, the
Trustee will distribute the Term Assets in kind to the holders of
Residual Class Certificates, unless a Maturity Shortening
Redemption or an In-Kind Special Distribution has occurred on or
prior to such date.
In the event that the Company is required to repurchase the
Term Assets as a result of an uncured documentation defect or
breach of its representation and warranty as to its title to the
Term Assets immediately prior to the transfer thereof to the
Trustee, the Trustee will distribute the repurchase price
received from the Company to the holders of the Residual Class
Certificates and the Amortizing Class Certificates, respectively,
in the same ratio as (i) the present value of all originally
scheduled future payments on the Term Assets after July 1, 2017
bears to (ii) the present value of all originally scheduled
future payments on the Amortizing Class Certificates, discounted
semiannually in each case at a rate of 7.60 percent per annum to
the date on which the repurchase price is distributed. Such ratio
will be calculated by the Company, as calculation agent, and such
distribution will be made fifteen days after receipt of the
repurchase price.
Maturity Shortening Redemption
Upon occurrence of a Tax Event (as defined below), the Term
Assets Issuer will have the right to shorten the maturity of the
Term Assets to the extent required, in the opinion of a
nationally recognized independent tax counsel selected by the
Term Assets Issuer, such that, after the shortening of the
maturity, interest paid on the Term Assets will be deductible by
it for federal income tax purposes. In the event that the
Shortened Maturity Date is on or prior to July 1, 2017, the Trust
Certificates will be redeemed on the Shortened Maturity Date. The
Trustee will distribute the payment received on the Term Assets
on the Shortened Maturity Date, which will equal principal plus
accrued interest on the Term Assets and will not contain any
premium, to the holders of the Residual Class Certificates and
Amortizing Class Certificates, respectively, in the same ratio as
(i) the present value of all originally scheduled future payments
on the Term Assets after July 1, 2017 bears to (ii) the present
value of all originally scheduled future payments on the
Amortizing Class Certificates, discounted semiannually in each
case at a rate of 7.60 percent per annum to the Shortened
Maturity Date. Such ratio will be calculated by the Calculation
Agent.
"Tax Event" means that the Term Assets Issuer shall have
received an opinion of a nationally recognized independent tax
counsel to the effect that on or after the date of the issuance
of the Term Assets, as a result of (a) any amendment to,
clarification of, or change (including any announced prospective
change) in laws, or any
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regulations thereunder, of the United States, (b) any
judicial decision, official administrative pronouncement, ruling,
regulatory procedure, notice or announcement, including any
notice or announcement of intent to adopt such procedures or
regulations (an "Administrative Action"), or (c) any amendment
to, clarification of or change in the official position of the
interpretation of such Administrative Action or judicial decision
that differs from the theretofore generally accepted position, in
each case, or after the date of the issuance of the Term Assets,
such change in tax law creates a more than insubstantial risk
that interest paid by the Term Assets Issuer on the Term Assets
is not, or will not be, deductible, in whole or in part, by the
Term Assets Issuer for purposes of United States federal income
tax.
Distribution of Term Assets on Payment Default or Acceleration
If a Payment Default or an Acceleration with respect to the
Term Assets occurs on or prior to July 1, 2017, the Trustee will
make an in-kind distribution (an "In-Kind Distribution") of the
Term Assets to the holders of the Trust Certificates. A "Payment
Default" means a default in the payment of any amount due on the
Term Assets from the Term Assets Issuer after the same becomes
due and payable (and the expiration of any applicable grace
period on the Term Assets). An "Acceleration" means the
acceleration of the maturity of the Term Assets following the
occurrence of any default on the Term Assets other than a Payment
Default, notwithstanding any subsequent recission and annulment
of such Acceleration by the requisite holders of the entire
series of Term Assets. The In-Kind Distribution will be made to
the holders of the Residual Class Certificates and Amortizing
Class Certificates, respectively, in the same ratio as (i) the
present value of all originally scheduled future payments on the
Term Assets after July 1, 2017 bears to (ii) the present value of
all originally scheduled future payments on the Amortizing Class
Certificates, discounted semiannually in each case at a rate of
7.60 percent per annum to the date of such distribution. Such
ratio will be calculated by the Calculation Agent. To the extent
necessary to avoid a distribution of Term Assets in unauthorized
denominations, the Trustee will cause the liquidation in a
commercially reasonable manner of such Term Assets as are
necessary, and will distribute the proceeds therefrom to
Certificateholders based on their respective rights to Term
Assets in unauthorized denominations.
Limitations on Beneficial Ownership of New Certificates.
Each registered holder of a New Certificate will be
required to deliver to the Trustee a certification (which will be
included in the Letter of Transmittal) upon purchase of the
Certificate to the effect that the beneficial owner thereof
(whether such registered holder or the ultimate beneficiary for
whom it holds such Certificate) is either (i) a United States
person, or (ii) a non-United States person who is exempt from
withholding under U.S. federal income tax laws and has completed,
accurately and in a manner reasonably satisfactory to the Trustee
or its agent, an IRS Form W-8 and delivered such Form to the
Trustee or its agent. Such registered holder will be deemed to
have represented and agreed with the Trustee that so long as it
is the registered holder of such Certificate, the beneficial
owner thereof will be a person described in clauses (i) or (ii)
above and, in the event of any change in the identity of the
beneficial owner for whom such registered holder is acting or any
lapse of a Form W-8 previously delivered to the Trustee, it will
promptly deliver a new certification or a current Form W-8, as
applicable. In the event such representation is untrue or such
current forms are not so furnished, the Certificate held by such
registered holder will be subject to mandatory resale as
described below.
If the Trustee determines that the deemed representation
made by such registered holder is incorrect or if such registered
holder does not provide the current Form W-8 as described above
within ten days after the prior such Form has lapsed, then, the
Trustee will furnish a notice to such registered holder stating
that (i) such registered holder must, within 30 calendar days
from the date of such notice, effect the registration of transfer
of its New Certificate to a person that certifies that the
beneficial owner of the Certificate is a U.S. person or exempt
from U.S. withholding tax as described above and (ii) if such
transfer does not occur by the thirtieth day, the registered
holder will be deemed to have appointed PSI and/or
Prudential-Bache Securities (U.K.) Inc. as its broker(s) to sell
such registered holder's certificate on its behalf to such an
exempt person at a commercially reasonable price (net of
customary brokerage commissions) within the next succeeding five
business days.
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No Further Rule 3a-7 Limitation
As a result of the rating assigned to the New Certificates,
they will not be subject to certain restrictions on transfer
applicable to the Old Certificates pursuant to Rule 3a-7.
DESCRIPTION OF THE TRUST AGREEMENT
General
The following summary of certain provisions of the Trust
Agreement and the Trust Certificates does not purport to be
complete and such summary is qualified in its entirety by
reference to the detailed provisions of the Trust Agreement
incorporated by reference hereto as described under
"Incorporation of Certain Documents by Reference." Article and
section references in parentheses below are to articles and
sections in the Trust Agreement. Wherever particular sections or
defined terms of the Trust Agreement are referred to, such
sections or defined terms are incorporated herein by reference as
part of the statement made, and the statement is qualified in its
entirety by such reference.
The Trustee
The Bank of New York, a New York banking corporation, acts
as trustee of the Trust pursuant to the Trust Agreement. The
Trustee's offices are located at One Wall Street, New York, New
York 10266.
The Trust Agreement provides that the Trustee and any
director, officer, employee or agent thereof will be indemnified
by the Company and held harmless against any loss, liability or
expense incurred in connection with any legal action relating to
the Trust Agreement or the Trust Certificates or the performance
of the Trustee's duties under the Trust Agreement, other than any
loss, liability or expense (i) that constitutes a specific
liability of the Trustee under the Trust Agreement or (ii)
incurred by reason of willful misfeasance, bad faith or
negligence in the performance of the Trustee's duties under the
Trust Agreement or as a result of a breach, or by reason of
reckless disregard, of the Trustee's obligations and duties under
the Trust Agreement. Pursuant to the Trust Agreement, as
compensation for the performance of its duties thereunder, the
Trustee is entitled to payment of trustee fees and reimbursement
of expenses by the Company pursuant to a separate agreement with
the Company, but shall not have any claim against the Trust with
respect thereto.
The Trustee makes no representations as to the validity or
sufficiency of the Trust Agreement, the New Certificates or any
Term Asset or related document. The Trustee is required to
perform only those duties specifically required under the Trust
Agreement. However, upon receipt of the various certificates,
reports or other instruments required to be furnished to it, the
Trustee is required to examine such documents and to determine
whether they conform to the applicable requirements of the Trust
Agreement.
The Trustee is unaffiliated with, but may have normal
banking relationships with, the Company and its respective
affiliates.
The Trust Agreement and, upon consummation of the Exchange
Offer, the provisions of the Trust Indenture Act of 1939, as
amended, incorporated by reference therein, contain limitations
on the rights of the Trustee thereunder, should it become a
creditor of the Trust, to obtain payment of claims in certain
cases or to realize on certain property received by it in respect
of any such claims, as security or otherwise. The Trustee is
permitted to engage in other transactions; provided, however,
that if it acquires any conflicting interest (as defined) it must
eliminate such conflict or resign.
Event of Default
There are no events of default with respect to the Trust
Certificates, including the New Certificates.
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Voting Rights
Voting rights will be allocated between the Residual
Certificateholders, on the one hand, and the Amortizing Class
Certificateholders on the other, respectively, at any date of
determination in the same ratio as (i) the present value of all
originally scheduled future payments on the Term Assets after
July 1, 2017 bears to (ii) the present value of all originally
scheduled future payments on the Amortizing Class Certificates,
discounted semiannually in each case at a rate of 7.60 percent
per annum to the date of determination. Such ratio will be
calculated by the Calculation Agent. All voting rights with
respect to the Residual Class Certificates will be allocated
among all Residual Class Certificateholders in proportion to the
respective Certificate Principal Balances of the then-outstanding
Residual Class Certificates held by such Certificateholders on
any date of determination. All voting rights with respect to the
Amortizing Class Certificates will be allocated among all
Amortizing Class Certificateholders in proportion to the
respective Notional Amounts of the then-outstanding Amortizing
Class Certificates held by such Certificateholders on any date of
determination.
The required percentage of Voting Rights of those Classes
of Trust Certificates that are materially adversely affected by
any modification or amendment of the Trust Agreement necessary to
consent to such modification or amendment is 66-2/3%.
Voting with Respect to Term Assets
The Trustee, as the holder of the Term Assets, has the
right to vote and give consents and waivers in respect of such
Term Assets as permitted by the depositary with respect thereto
and except as otherwise limited by the Trust Agreement. In the
event that the Trustee receives a request from the Term Assets
Issuer for its consent to any amendment, modification or waiver
of the Term Assets or any document relating thereto, or receives
any other solicitation for any action with respect to the Term
Assets, the Trustee shall mail a notice of such proposed
amendment, modification, waiver or solicitation to each
Certificateholder of record as of such date. The Trustee shall
request instructions from the Certificateholders as to whether or
not to consent to or vote to accept such amendment, modification,
waiver or solicitation. The Trustee shall consent or vote, or
refrain from consenting or voting, in the same proportion (based
on the relative voting rights of the Trust Certificates) as the
Trust Certificates of the Trust were actually voted or not voted
by the Certificateholders thereof as of a date determined by the
Trustee prior to the date on which such consent or vote is
required; provided, however, that, notwithstanding anything to
the contrary herein, the Trustee shall at no time vote in favor
of or consent to any matter (i) which would alter the timing or
amount of any payment on the Term Assets, including, without
limitation, any demand to accelerate the Term Assets or (ii)
which would result in the exchange or substitution of any Term
Asset pursuant to a plan for the refunding or refinancing of such
Term Asset, except in each case with the unanimous consent of the
Certificateholders, and subject to the requirement that such vote
or consent would not, based on an Opinion of Counsel, cause the
Trust to fail to be characterized as a grantor trust for U.S.
federal income tax purposes or result in a sale or exchange of
any Trust Certificate for federal income tax purpose. The Trustee
shall have no liability for any failure to act resulting from
Certificateholders' late return of, or failure to return,
directions requested by the Trustee from the Certificateholders.
Modification and Waiver
The Trust Agreement may be amended by the Company and the
Trustee, without notice to or consent of the Certificateholders,
for certain purposes including (i) to cure any ambiguity, (ii) to
correct or supplement any provision therein which may be
inconsistent with any other provision therein, (iii) to add or
supplement any Credit Support (as defined in the Trust Agreement)
for the benefit of any Certificateholders, (iv) to add to the
covenants, restrictions or obligations of the Company or the
Trustee for the benefit of the Certificateholders, (v) to add,
change or eliminate any other provisions with respect to matters
or questions arising under such Trust Agreement, (vi) to comply
with any requirements imposed by the Internal Revenue Code of
1986 (the "Code") or (vii) to evidence the issuance of new
Certificates in exchange for Trust Certificates exchanged by the
Company as described herein; provided that (x) any such amendment
described in (i) through (vii) will not, as evidenced by an
Opinion of Counsel, cause the Trust to fail to qualify as a grantor
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trust for federal income tax purposes or result in a sale or exchange
of any Certificate for tax purposes and (y) the Trustee has
received (1) a certificate of the Company to the effect that such
amendment will not have a material adverse effect on any class of
Certificateholders and (2) written confirmation from each Rating
Agency rating such Trust Certificates, if any, that such
amendment will not cause such Rating Agency to reduce or withdraw
the then current rating thereof. Without limiting the generality
of the foregoing, the Trust Agreement may also be modified or
amended from time to time by the Company and the Trustee, with
the consent of the holders of Certificates of each class
evidencing not less than the "Required Percentage--Amendment" of
the Voting Rights of those Trust Certificates of such Classes
that are affected by such modification or amendment for the
purpose of adding any provision to or changing in any manner or
eliminating any provision of the Trust Agreement or of modifying
in any manner the rights of such Certificateholders; provided
that any such amendment shall not, as evidenced by an Opinion of
Counsel, cause the Trust to fail to qualify as a grantor trust
for federal income tax purposes.
No such modification or amendment may, however, (i) reduce
in any manner the amount of or alter the timing of, distributions
or payments which are required to be made on any Certificate
without the consent of the holder of such Trust Certificate or
(ii) reduce the aforesaid Required Percentage of Voting Rights
required for the consent to any such amendment without the
consent of the holders of all Certificates covered by the Trust
Agreement then outstanding.
Reports to Certificateholders; Notices
Reports to Certificateholders. With each distribution to
Certificateholders, the Trustee will forward or cause to be
forwarded to each such Certificateholder and to the Company a
statement setting forth: (i) the amount of such distribution to
Certificateholders of such Class allocable to principal, if any,
on the Trust Certificates of such Class; (ii) the amount of
compensation received by the Trustee for the period relating to
such Distribution Date, (iii) the aggregate stated principal
amount or, if applicable, notional principal amount of the Term
Assets and the current interest rate thereon at the close of
business on such Distribution Date; and (iv) the aggregate
Certificate Principal Balance or aggregate Notional Amount, if
applicable, of each Class of Trust Certificates at the close of
business on such Distribution Date, separately identifying any
reduction in such aggregate Certificate Principal Balance or
aggregate Notional Amount due to the allocation of any Realized
Losses or otherwise. In the case of information furnished
pursuant to subclauses (i) and (ii) above, the amounts shall be
expressed as a U.S. dollar amount per minimum denomination of
Trust Certificates or for such other specified portion thereof.
Subject to the occurrence of a Maturity Shortening Redemption or
an In-Kind Distribution, the holders of New Certificates will
receive no such reports until the distribution in-kind on July 1,
2017. Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each person who at
any time during the calendar year was a Certificateholder a
statement containing the information set forth in subclauses (i)
and (ii) above, aggregated for such calendar year or the
applicable portion thereof during which such person was a
Certificateholder. Such obligation of the Trustee shall be deemed
to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant
to any requirements of the Code as are from time to time in
effect.
Notices. Any notice required to be given to a holder of a
Registered Certificate will be mailed to the address of such
holder set forth in the applicable Certificate Register.
Replacement Certificates
If a New Certificate is mutilated, destroyed, lost or
stolen, it may be replaced at the corporate trust office or
agency of the applicable Trustee in the City and State of New
York, upon payment by the holder of such expenses as may be
incurred by the applicable Trustee in connection therewith and
the furnishing of such evidence and indemnity as such Trustee may
require. Mutilated Certificates must be surrendered before new
Certificates will be issued.
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Company Exchange
The Company may exchange any Trust Certificates for one or
more newly-created Classes of Certificates evidencing interests
in the related Trust, having such terms as are provided in a
request by the Company; provided that (i) in no case shall the
aggregate distributions payable on such newly-created Classes of
Certificates exceed the aggregate distributions payable on the
Trust Certificates exchanged by the Company for the newly-created
Class of Certificates; (ii) in no case shall the issuance of such
newly-created Trust Certificates adversely affect the rights or
interests of Holders of Trust Certificates not so exchanged;
(iii) the Company has delivered to the Trustee an Opinion of
Counsel to the effect that such exchange will not (a) be
inconsistent with the Trust's continued satisfaction of the
applicable requirements for an exemption from registration
pursuant to Rule 3a-7 and (b) cause the related Trust to fail to
be characterized as a grantor trust for U.S. federal income tax
purposes; and (iv) the Rating Agency Condition, if any, is
satisfied.
Termination of the Trust
The Trust shall terminate upon (i) the distribution of the
Term Assets on July 1, 2017, (ii) the date of any Maturity
Shortening Redemption or (iii) the date of an In-Kind
Distribution on or prior thereto.
The final distribution will be made only upon surrender and
cancellation of the Trust Certificates at an office or agency
appointed by the Trustee.
Governing Law
The Trust Agreement and the Trust Certificates will be
governed by, and construed in accordance with, the laws of the
State of New York. Upon consummation of the Exchange Offer, the
Trust Agreement will be subject to the provisions of the Trust
Indenture Act of 1939, as amended, that are required to be part
of the Trust Agreement and will, to the extent applicable, be
governed by such provisions.
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of certain anticipated
U.S. federal income tax consequences of the ownership of Trust
Certificates and the exchange of Old Certificates for New
Certificates (the "Exchange") pursuant to the Exchange Offer. The
discussion is based on the Code and the regulations issued
thereunder, and interpretations of law, rulings and decisions
currently in effect, all of which are subject to change. Any such
change may be applied retroactively, and may adversely affect the
U.S. federal income tax consequences described herein. Except
where otherwise noted, the discussion below is addressed to
holders that are "U.S. persons" (as defined below) and that hold
Trust Certificates as capital assets. It does not discuss state,
local or foreign tax consequences, nor does it discuss all the
tax consequences that may be relevant to a holder subject to
special rules, including dealers in securities or commodities,
banks, savings and loan associations and similar financial
institutions, tax-exempt organizations, insurance companies,
taxpayers that hold Trust Certificates as part of a hedged or
integrated transaction (such as a "straddle" or "conversion
transaction") for U.S. federal income tax purposes, or taxpayers
whose functional currency is other than the U.S. dollar. It also
does not discuss tax consequences for individuals or entities
taxed as individuals.
The term "U.S. person" means a citizen or resident of the
United States, a corporation, partnership or other entity created
or organized in or under the laws of the United States or any
political subdivision thereof, an estate the income of which is
subject to U.S. federal income taxation regardless of its source,
or a trust if (i) a U.S. court is able to exercise primary
supervision over the trust's administration and (ii) one or more
U.S. persons have the authority to control all of the trust's
substantial decisions.
PROSPECTIVE HOLDERS SHOULD CONSULT THEIR TAX ADVISORS AS TO
THE U.S. FEDERAL TAX CONSEQUENCES TO THEM OF THE EXCHANGE, AND OF
ACQUIRING, HOLDING AND DISPOSING OF TRUST CERTIFICATES,
INCLUDING, IN PARTICULAR, THE APPLICATION IN THEIR PARTICULAR
CIRCUMSTANCES OF THE TAX CONSIDERATIONS DISCUSSED BELOW, AS WELL
AS THE APPLICATION OF STATE, LOCAL, FOREIGN OR OTHER TAX LAWS.
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Exchange of Old Certificates for New Certificates
The Exchange will not be a taxable event for U.S. federal
income tax purposes. As a result, a holder of an Old Certificate
whose Old Certificate is accepted in the Exchange Offer will not
recognize gain on the Exchange. For purposes of calculating the
issue price of, and a holder's basis and holding period with
respect to, a New Certificate, a New Certificate will be treated
as a continuation of the holder's interest in the Old Certificate
for which it was exchanged. A tendering holder's tax basis in the
New Certificates will be the same as such holder's tax basis in
its Old Certificates. A tendering holder's holding period for the
New Certificates received pursuant to the Exchange Offer will
include its holding period for the Old Certificates surrendered
therefor.
Characterization of the Trust
For U.S. federal income tax purposes, the Trust will not be
treated as an association taxable as a corporation (or a publicly
traded partnership treated as an association). Although the
characterization of the Trust is not certain, the Trust should be
treated for U.S. federal income tax purposes as a grantor trust,
and the Trustee intends to report income, gain, loss and
deductions to the Internal Revenue Service ("IRS") on that basis.
If the Trust were not classified as a grantor trust, it would be
classified as a partnership. As a consequence, the Trust will not
be subject to U.S. federal income taxation.
Prospective investors should be aware that no rulings have
been or are expected to be sought from the IRS with respect to
the classification of the Trust (or any of the other U.S. federal
income tax consequences discussed in this summary) and there can
be no assurance that the IRS will agree with the characterization
of the Trust as a grantor trust (or with the other U.S. federal
income tax consequences discussed herein). See "--Alternative
Characterizations." Accordingly, prospective purchasers are urged
to consult their tax advisers regarding the U.S.
federal income tax classification of the Trust.
Under the U.S. federal income tax rules applicable to
grantor trusts, a holder of a Trust Certificate will be treated
as owning the rights to those payments on the Term Assets that
are allocable to that Trust Certificate. The sale of a Trust
Certificate will be considered a sale of a holder's interest in
those payments. In addition, a holder may deduct its pro rata
share of the fees and other deductible expenses paid by the
Trust, at the same time and to the same extent as such items
would be deducted by the holder if the holder paid directly a pro
rata portion of the amounts paid by the Trust.
The Term Assets Prospectus indicates that the Term Assets
underlying the Trust Certificates were sold based on the Term
Assets Issuer's belief that they constitute indebtedness of the
Term Assets Issuer for U.S. federal income tax purposes. The
following discussion is based on the assumption that the Term
Assets will constitute debt instruments in their entirety. Except
for the discussion under "--Alternative Characterizations," the
following also assumes that the Trust will be classified as a
grantor trust.
Purchase and Holding of Trust Certificates
A purchaser of a Trust Certificate will be treated as having
acquired the rights to those payments on the Term Assets that are
allocable to that Trust Certificate and will be taxed under the
"stripped bond" rules of the Code.
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The holder will be treated as having purchased a newly issued,
single debt instrument providing for payments equal to the
payments on the Term Assets allocable to the Trust Certificate, and
having original issue discount ("OID") equal to the excess of the
sum of such payments over the holder's purchase price for the Trust
Certificate (which would be treated as the "issue price"). In
determining the purchase price for a Trust Certificate for this
purpose, a portion of the purchase price of the Trust Certificate
may be separately allocated to amounts held by the Trust pending
distribution to holders (the recovery of which amounts would not
be taxable). Any such allocation would reduce the amount paid for
(and the amount payable on) such Trust Certificate.
Under the OID rules, in general, each holder of a Trust
Certificate, whether such holder uses the cash or the accrual
method of tax accounting, will be required to include in ordinary
gross income the sum of the "daily portions" of OID on the Trust
Certificate for all days during the taxable year that the holder
owns the Trust Certificate. The daily portions of OID on a Trust
Certificate are determined by allocating to each day in any
accrual period a ratable portion of the OID allocable to that
accrual period. Accrual periods may be any length and may vary in
length over the term of a Trust Certificate, provided that no
accrual period is longer than one year and each scheduled payment
of principal or interest occurs on either the final day or the
first day of an accrual period. The amount of OID on a Trust
Certificate allocable to each accrual period is determined by
multiplying the "adjusted issue price" (as defined below) of the
Trust Certificate at the beginning of the accrual period by the
yield to maturity of such Trust Certificate (appropriately adjusted
to reflect the length of the accrual period). The yield to
maturity of a Trust Certificate is the discount rate that causes
the present value of all payments on the Trust Certificate as of
its issue date to equal the issue price of such Certificate. The
"adjusted issue price" of a Trust Certificate at the beginning of
any accrual period will generally be the sum of its issue price
and the amount of OID allocable to all prior accrual periods,
reduced by the amount of all payments made with respect to such
Trust Certificate in all prior accrual periods.
Because holders of Residual Class Certificates will not be
receiving current distributions, OID will be includible as income
prior to the receipt of cash attributable to such income and the
amount of OID includible in income will increase each year.
It is not clear how the possibility of a Maturity
Shortening as a result of a Tax Event, and the resulting
distribution to Amortizing Class Certificate holders of a portion
of the payment received by the Trust on the Shortened Maturity
Date, should be taken into account for purposes of determining
the taxation of holders at, and prior to, the Shortened Maturity
Date (including, but not limited to, the amount of OID required
to be included by holders in ordinary gross income). The Trustee
intends to take the position that the possibility of a Maturity
Shortening should not affect the U.S. federal income tax
consequences to holders prior to the Maturity Shortening. Under
this treatment, if the maturity of the Term Assets was shortened
as a result of a Tax Event, a holder would be treated, solely for
OID purposes, as acquiring a newly issued OID bond, and would be
required to determine OID on the newly issued bond taking into
account the Shortened Maturity Date and the amount required to be
distributed to the holder on that date. The amount of OID
required to be included in the holder's ordinary gross income as
a result of the redetermination could be more or less than the
amount determined without taking into account the Maturity
Shortening. There can be no assurance, however, that the IRS will
not take a different position on the effect of a potential
Maturity Shortening, which position may have less favorable tax
consequences. See "-Alternative Characterizations." Prospective
purchasers should consult their tax advisers with respect to the
effect of a potential Maturity Shortening.
The Trust currently intends, for information reporting
purposes, to account for OID reportable by holders of Trust
Certificates by reference to the first price at which a
substantial amount of the Trust Certificates is sold to
purchasers (other than PSI), even though the amount of OID will
differ for subsequent purchasers. Such prospective purchasers
should consult their tax advisers regarding the proper
calculation of OID.
Distributions
Cash distributions on the Trust Certificates and the
distribution of the Term Assets on July 1, 2017, to Residual
Class Certificate holders will not be subject to additional
taxation. An In-Kind Distribution may be treated in whole or in
part as equivalent to a sale or exchange.
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Sale or Exchange of Trust Certificates or Term Assets
The tax basis of a holder of a Trust Certificate in a Trust
Certificate generally will equal the cost of the Trust Certificate
increased by any amounts includible in income as OID, and reduced
by any payments made on the Trust Certificate.
Upon the sale or exchange of a Trust Certificate (other than
the Exchange), a holder generally will recognize gain or loss
equal to the difference between the amount realized on the sale
or exchange and the holder's tax basis in Trust Certificate. Gain
or loss recognized by an individual holder on the sale or
exchange of a Trust Certificate generally will be capital gain or
loss, and generally will be subject to a maximum tax rate of 28%
in respect of property held for more than one year and to a
maximum tax rate of 20% in respect of property held in excess of
18 months..
A holder will recognize gain or loss on any sale by the
Trust of Term Assets, including in connection with an In-Kind
Distribution, equal to the difference between the portion of the
amount realized on the sale allocable to the holder and the
allocable portion of the holder's basis in the Trust Certificate.
Alternative Characterizations
As noted above, there can be no assurance that the IRS will
agree with the characterization of the Trust as a grantor trust.
It is possible that the IRS could seek to classify the Trust as a
partnership, although even if the IRS were successful the Trust
would not be subject to U.S. federal income tax. While not
certain, if the Trust is classified as a partnership, it should
be eligible for the election out of the partnership tax rules of
subchapter K of the Code, under Treasury Regulation Section
1.761-2. In mutual consideration for each holder's purchase of a
Trust Certificate, each holder of a Trust Certificate is deemed
to have consented to the making of such a protective election as
of the date of formation of the Trust. As a result of the
election, each holder of a Trust Certificate would be required to
report its respective share of the items of income, deductions
and credits of the Trust on its respective U.S. federal income
tax return in a manner substantially similar to the U.S. federal
income tax reporting required under the grantor trust rules.
However, if the Trust were not eligible to make the election, the
method of taxation of holders of Trust Certificates could differ
significantly from the treatment described in this summary. Among
those differences, (i) the Trust would be required to account for
its income and deductions at the Trust level, and to utilize a
taxable year for reporting purposes, (ii) income from the Term
Assets would be taxed under the rules of the Code applicable to
whole debt instruments rather than under the "stripped bond"
rules described above, and (iii) each holder would be required to
separately take into account such holder's distributive share of
income and deductions of the Trust. A holder would take into
account its distributive share of Trust income and deductions for
each taxable year of the Trust in the holder's taxable year which
ends with or within the Trust's taxable year. Prospective
purchasers are urged to consult their tax advisers regarding the
U.S. federal income tax classification of the Trust.
Adverse tax consequences might also result if the IRS takes
a different position than the position described above under
"--Purchase and Holding of Trust Certificates" with respect to
the effect on holders of a potential distribution to Amortizing
Class Certificate holders of a portion of the payment received by
the Trust on a Shortened Maturity Date. For example, the IRS
might treat the Amortizing Class Certificate as a right to
payments on the Term Assets coupled with a separate agreement, in
the nature of a put option, between Amortizing Class Certificate
holders, on the one hand, and Residual Class Certificate holders,
on the other hand. Under this characterization, a Maturity
Shortening event would be a taxable event. Moreover, the
existence of a deemed put option might trigger the Code's
"straddle" rules, in which case, among other matters, gain or
loss on the sale of a Trust Certificate would be short-term
capital gain or loss regardless of the period during which the
holder held the Trust Certificate.
Non-U.S. Holders
A holder that is not a U.S. person and that is not subject
to U.S. federal income tax as a result of any direct or indirect
connection to the United States other than its ownership of a
Trust Certificate will not be subject to United States income or
withholding tax, except as described below and under
"--Information Reporting and Backup Withholding," in respect of
interest income or gain on the Term Assets if the holder provides
an appropriate statement (generally on IRS Form W-8), signed
under penalties of perjury, identifying the holder and stating, among
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other things, that the holder is not a U.S. person and that the
holder is not a "10-percent shareholder" or "related controlled
foreign corporation" with respect to the Term Assets Issuer. If
these conditions are not met, a 30 percent withholding tax will
apply to interest income from the Trust Certificates, unless an
income tax treaty reduces or eliminates such tax or unless the
interest is effectively connected with the conduct of a trade or
business within the United States by such holder. In the latter
case, such holder will be subject to U.S. federal income tax with
respect to all income from the Term Assets at regular rates
applicable to U.S. taxpayers.
A holder that is not a U.S. person may also be subject to
U.S. federal income taxation with respect to a Trust Certificate
if it is a personal holding company, a corporation that
accumulates earnings to avoid U.S. taxes on shareholders or a
private foundation under the Code.
Information Reporting and Backup Withholding
The Trustee will furnish or make available, within 90 days
after the end of each calendar year, to each party registered
during such calendar year as a holder, such information as is
required under the Code or regulations under the Code to enable
each holder to file its U.S. federal income tax returns.
Distributions made on a Trust Certificate and proceeds from
the sale of a Trust Certificate to or through certain brokers may
be subject to a "backup" withholding tax of 31 percent unless, in
general, the holder complies with certain procedures or
establishes that it is a corporation or otherwise exempt from
such withholding. A holder may be required to provide a statement
under penalties of perjury (generally on IRS Form W-9 for U.S.
persons or Form W-8 for non-U.S. persons) in order to establish
an exemption. Any amounts so withheld from distributions on the
Trust Certificate would be allowed as a credit against the
holder's U.S. federal income tax liability, or upon application
by the holder to the IRS, would be refunded by the IRS to the
extent it exceeds such liability.
PLAN OF DISTRIBUTION
Each broker or dealer that receives New Certificates for its
own account pursuant to the Exchange Offer must acknowledge that
it will deliver a prospectus in connection with any resale of
such New Certificates. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker or dealer
in connection with resales of New Certificates received in
exchange for Old Certificates where such Old Certificates were
acquired as a result of market-making activities or other trading
activities. The Company has agreed that it will make this
Prospectus, as amended or supplemented, available to any broker
or dealer for use in connection with any such resale for a period
of one year. In addition, until such date, all brokers or dealers
effecting transactions in the New Certificates may be required to
deliver a prospectus.
The Company will not receive any proceeds from any sale of
New Certificates by brokers or dealers. New Certificates received by
brokers or dealers for their own account pursuant to the Exchange
Offer may be sold from time to time in one or more transactions
in the over-the-counter market, in negotiated transactions,
through the writing of options on the New Certificates or a
combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such
prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or
dealers who may receive compensation in the form of commissions
or concessions from any such broker or dealer and/or the purchasers
of any such New Certificates. Any broker or dealer that resells New
Certificates that were received by it for its own account
pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such New Certificates may be
deemed to be an "underwriter" within the meaning of the
Securities Act and any profit on any such resale of New
Certificates and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under
the Securities Act. The Letter of Transmittal states that by
acknowledging that it will deliver and by delivering a
prospectus, a broker or dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
Starting on the Expiration Date, the Company will promptly
send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker or dealer that requests
such documents in the Letter of Transmittal. The Company has
agreed to pay all expenses incident to the Exchange Offer
(including the expenses
32
<PAGE>
of one counsel for the Holders of the Certificates) other than
commissions or concessions of any brokers or dealers and will
indemnify the Holders of the New Certificates (including any
brokers or dealers) against certain liabilities, including
liabilities under the Securities Act.
LEGAL MATTERS
The validity of the New Certificates and certain United
States Federal income taxation matters will be passed upon for
the Trust by Cleary, Gottlieb, Steen & Hamilton, New York, New
York.
33
<PAGE>
APPENDIX A
IDENTIFICATION OF TERM ASSETS
Term Assets Issuer:....................Federal Express Corporation
Term Assets:................................7.60% due July 1, 2097
Dated:...............................................June 10, 1997
Original Principal Maturity Date:.....................July 1, 2097
Original Principal Amount Issued:.....................$250,000,000
CUSIP Number:............................................313309AP1
Stated Interest Rate:........................................7.60%
Interest Payment Dates:.......................January 1 and July 1
Principal Amount of Term Assets
Deposited under Trust Agreement:.............$52,000,000
Ranking:..............................Pari passu with all other
unsecured and unsubordinated
indebtedness of Term Assets
Issuer
Events of Default:....................(a) default for more than 30
days in the payment of any
interest; (b) default in
the payment of principal
of, or premium, if any, at
its maturity; (c) default
in the performance, or
breach, of any other
covenant of the Term Assets
Issuer in the Indenture for
more than 60 days after
written notice as provided
in the Indenture; and (d)
certain events in
bankruptcy, insolvency or
reorganization in respect
of the Term Assets Issuer
Available Information Regarding the Term Assets Issuer
The Term Assets Issuer is subject to the information requirements
of the Securities Exchange Act of 1934 and in accordance
therewith files reports and other information with the
Commission. Such reports, proxy and information statements and
other information filed by the Term Assets Issuer with the
Commission can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's regional
offices at 500 West Madison Street, 14th Floor, Chicago, Illinois
60661 and 75 Park Place, New York, New York 10007. Copies of such
material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Commission maintains a Web site at
http://www.sec.gov containing reports, proxy statements and other
information regarding registrants that file electronically with
the Commission. In addition, certain material described above and
other information will also be available for inspection at the
offices of the New York Stock Exchange at 20 Broad Street, New
York, New York.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
The Company's Bylaws provide that the Company shall
indemnify each of its directors and officers who was or is a
party or is threatened to be made a party to any threatened,
pending or contemplated action, suit or proceeding, whether
civil, criminal, administrative or investigative by reason of the
fact that he is or was a director or officer of the Company other
than an action by or in the right of the Company (for which the
Company may indemnify such persons under certain circumstances).
Section 145 of the Delaware General Corporation Law (the
"GCL") provides as follows:
"(a) A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that
he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit
or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
(c) To the extent that a director, officer, employee or
agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred
to in subsections (a) and (b) of this section, or in defense of
any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of
this section (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer,
employee or agent is proper in the circumstances because he has
met the applicable standard of conduct set forth in subsections
(a) and (b). Such determination shall be made (1) by a majority
vote of the board of directors who are not parties to such
action, suit or proceeding, even though less than a quorum, or
(2) if there are no such directors, or if such directors so
direct, by independent legal counsel in a written opinion, or (3)
by the stockholders.
II-1
<PAGE>
(e) Expenses (including attorneys' fees) incurred by an officer
or director in defending any civil, criminal, administrative, or
investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action,
suit or proceeding upon receipt of undertaking by or on behalf of
such director or officer to repay such amount if it shall
ultimately be determined that he is not entitled to be
indemnified by the corporation as authorized in this section.
Such expenses (including attorneys' fees) incurred by other
employees and agents may be so paid upon such terms and
conditions, if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other subsections of
this section shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of expenses
may be entitled under any bylaw, agreement, vote of stockholders
or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while
holding such office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted
against him and incurred by him in any such capacity, or arising
out of his status as such, whether or not the corporation would
have the power to indemnify him against such liability under this
section.
(h) For purposes of this section, references to "the
corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have
had power and authority to indemnify its directors, officers, and
employees or agents, so that any person who is or was a director,
officer, employee or agent for such constituent corporation, or
is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall
stand in the same position under this section with respect to the
resulting or surviving corporation as he would have with respect
to such constituent corporation if its separate existence had
continued.
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan; and references to "serving
at the request of the corporation" shall include any service as a
director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director,
officer, employee, or agent with respect to an employee benefit
plan, its participants, or beneficiaries; and a person who acted
in good faith and in a manner he reasonably believed to be in the
interest of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to
in this section.
(j) The indemnification and advancement of expenses
provided by, or granted pursuant to, this section shall, unless
otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of
expenses or indemnification brought under this section or under
any bylaw, agreement, vote of stockholders or disinterested
directors, or otherwise. The Court of Chancery may summarily
determine a corporation's obligation to advance expenses
(including attorneys' fees)."
The Amended and Restated Certificate of Incorporation also
limit the personal liability of directors to the Company and its
stockholders for monetary damages resulting from certain breaches
of the directors' fiduciary duties. The Amended and Restated
Certificate of Incorporation of the Company provide as follows:
"No director of the Corporation shall be personally liable
to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director; provided that the
provisions of this Article Eleventh shall not eliminate or limit
the liability of a director (a) for any breach of the Director's
duty of loyalty to the
II-2
<PAGE>
Corporation and to its stockholders, (b) for acts or omissions
not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the General
Corporation Law of the State of Delaware or (iv) for any
transaction from which such director derived any improper
personal benefit. If the GCL is amended after the filing of this
Amended and Restated Certificate of Incorporation so as to
authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of each
director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the law of the State of Delaware as
the same exists from time to time. Any repeal or modification of
this Article Eleventh by the stockholders of the Corporation
shall not adversely affect any elimination or limitation on the
personal liability of a director existing at the time of such
repeal or modification."
Item 21. Exhibits.
Exhibit
Number Exhibit Description
- ------- -------------------
Exhibit 4.1 Form of Receipts of Corporate Securities,
Series FDX 1997-1, Residual Class (included
in Exhibit 4.3).
Exhibit 4.2 Trust Agreement, dated as of August 28, 1997,
between Prudential Securities Structured Assets,
Inc. and The Bank of New York, as trustee.
Exhibit 4.3 Series Supplement, Series FDX 1997-1 dated as
of August 28, 1997 between Prudential Securities
Structured Assets, Inc. and The Bank of New York,
as trustee.
Exhibit 5.1 Opinion of Cleary, Gottlieb, Steen & Hamilton
relating to the New Certificates.*
Exhibit 23.1 Consent of Cleary, Gottlieb, Steen & Hamilton
(included in Exhibits 5.1).*
Exhibit 24.1 Powers of Attorney (included on the signature
page of the Registrant in this Registration
Statement).
Exhibit 25.1 Statement of Eligibility of The Bank of New
York, as Trustee, relating to Trust Certificates,
on Form T-1.
Exhibit 99.1 Form of Letter of Transmittal.*
Exhibit 99.2 Form of Notice of Guaranteed Delivery.*
Exhibit 99.3 Registration Rights Agreement dated as of
August 25, 1997 between Prudential Securities
Structured Assets, Inc. and Prudential Securities
Incorporated.
* To be filed by Amendment.
Item 22. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section l0(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
registration (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration
statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities
offered (if the total dollar value of securities
offered would not exceed that which was
II-3
<PAGE>
registered) and any deviation from the low or high
and of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price
represent no more than 20 percent change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed
in the registration statement or any material
change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) shall not apply if the registration
statement is on Form S-3, form S-8, or Form F-3 and
the information required to be included in a
post-effective amendment by those paragraphs is
contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plans
annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant, pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by any such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of
whether or not such indemnification is against public policy as
expressed in the Securities Act of 1933 and will be governed by
the final adjudication of such issue.
The undersigned registrant hereby undertakes to
respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11, or
13 of this form, within one business day of receipt of such
request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes information
contained in documents filed subsequent to the effective date of
the registration statement through the date of responding to the
request.
The undersigned registrant hereby undertakes to supply
by means of a post-effective amendment all information concerning
a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration
statement when it became effective.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act,
the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on
October ___, 1997.
PRUDENTIAL SECURITIES STRUCTURED ASSETS,
INC.
By: /s/ Christopher Perry
-------------------------------------
Christopher Perry
President
KNOW ALL PERSONS BY THESE PRESENTS, that each person
whose signature appears below hereby constitutes and appoints
Christopher Perry and Terrance O'Dwyer, and each of them, his or
her true and lawful attorneys-in-fact and agents, each acting
alone, with full power of substitution and resubstitution, for
him or her and in his or her name, place and stead, in any and
all capacities, to sign a Registration Statement on Form S-4 of
Prudential Securities Structured Assets, Inc., and any and all
amendments thereto, including post-effective amendments, and to
file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, each
acting alone, full power and authority to do and perform to all
intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact
and agents, each acting alone, or the substitutes for each
attorneys-in-fact and agents, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of
1933, this registration statement has been signed by the
following persons in the capacities and on the date indicated
above.
Signature Title
--------- -----
/s/ Howard Whitman Chairman of the Board
- ------------------------------ and Director
Howard Whitman
/s/ Christopher Perry President
- ------------------------------ (Principal Executive Officer)
Christopher Perry
/s/ William J. Horan Chief Financial Officer
- ------------------------------ (Principal Financial and
William J. Horan Accounting Officer)
/s/ Elizabeth W. Castagna Treasurer
- ------------------------------
Elizabeth W. Castagna
/s/ Alan D. Hogan Director
- ------------------------------
Alan D. Hogan
/s/ Ruth Lavelle Director
- ------------------------------
Ruth Lavelle
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit Description
- ------- -------------------
Exhibit 4.1 Form of Receipts of Corporate Securities,
Series FDX 1997-1, Residual Class (included
in Exhibit 4.3).
Exhibit 4.2 Trust Agreement, dated as of August 28, 1997,
between Prudential Securities Structured Assets,
Inc. and The Bank of New York, as trustee.
Exhibit 4.3 Series Supplement, Series FDX 1997-1 dated as
of August 28, 1997 between Prudential Securities
Structured Assets, Inc. and The Bank of New York,
as trustee.
Exhibit 5.1 Opinion of Cleary, Gottlieb, Steen & Hamilton
relating to the New Certificates.*
Exhibit 23.1 Consent of Cleary, Gottlieb, Steen & Hamilton
(included in Exhibits 5.1).*
Exhibit 24.1 Powers of Attorney (included on the signature
page of the Registrant in this Registration
Statement).
Exhibit 25.1 Statement of Eligibility of The Bank of New
York, as Trustee, relating to Trust Certificates,
on Form T-1.
Exhibit 99.1 Form of Letter of Transmittal.*
Exhibit 99.2 Form of Notice of Guaranteed Delivery.*
Exhibit 99.3 Registration Rights Agreement dated as of
August 25, 1997 between Prudential Securities
Structured Assets, Inc. and Prudential Securities
Incorporated.
* To be filed by Amendment.
<PAGE>
============================================
No person has been authorized to give
any information or to make any
representations other than those
contained or incorporated by reference
in this Prospectus and the accompanying
Letter of Transmittal and, if given
or made, such information or
representations must not be relied upon
as having been authorized by the Trust,
the Company or the Exchange Agent.
Neither this Prospectus nor the
accompanying Letter of Transmittal, or
both together, constitute an offer to
sell or the solicitation of an offer to
buy securities in any jurisdiction to
any person to whom it is unlawful to make
such offer or solicitation. Neither the
delivery of this Prospectus, nor the
accompanying Letter of Transmittal, or
both together, nor any sale made
hereunder shall, under any
circumstances, create an implication
that there has been no change in the
affairs of the trust since the date
hereof or thereof or that the
information contained herein is correct
at any time subsequent to the date
hereof or thereof.
TABLE OF CONTENTS
Page
----
Available Information........
Incorporation of Certain
Documents by Reference.......
Prospectus Summary...........
Risk Factors.................
Use of Proceeds..............
Formation of the Trust.......
The Term Asset Issuer........
Description of the Term
Assets.....................
The Exchange Offer...........
Description of the New
Certificates.................
Description of the
Trust Agreement............
Certain U.S. Federal Income
Tax Consequences...........
Plan of Distribution.........
Legal Matters................
============================================
Receipts on Corporate
Securities Trust, Series FDX 1997-1
Offer to Exchange
Receipts of Corporate Securities,
Series FDX 1997-1, Residual Class
which have been registered under the
Securities Act of 1993, as amended,
for any and all outstanding
Receipts of Corporate Securities,
Series FDX 1997-1, Residual Class
[Date]
============================================
[Execution Copy]
====================================================================
BASE TRUST AGREEMENT
between
PRUDENTIAL SECURITIES STRUCTURED ASSETS, INC.
Depositor
and
THE BANK OF NEW YORK
Trustee
Dated as of August 28, 1997
====================================================================
<PAGE>
TABLE OF CONTENTS
ARTICLE I
Definitions and Assumptions
Section 1.1. Definitions.........................................1
Section 1.2. Rules of Construction..............................11
ARTICLE II
Declaration of Trusts; Issuance of Certificates
Section 2.1. Creation and Declaration of Trusts;
Assignment of Term Assets.........................12
Section 2.2. Acceptance by Trustee..............................12
Section 2.3. Repurchase or Substitution of Certain Term Assets..12
Section 2.4. Representations and Warranties of the Depositor....13
Section 2.5. Breach of Representation, Warranty or Covenant.....14
Section 2.6. Agreement to Execute, Authenticate and Deliver
Certificates......................................14
Section 2.7. Statement of Intent................................14
ARTICLE III
Administration of each Trust
Section 3.1. Administration of each Trust.......................14
Section 3.2. Collection of Certain Term Asset Payments..........15
Section 3.3. Certificate Account................................15
Section 3.4. Investment of Funds in the Accounts................16
Section 3.5. Maintenance of Credit Support......................17
Section 3.6. In-Kind Distribution Events........................17
Section 3.7. Retained Interest..................................18
Section 3.8. [Intentionally omitted]............................18
Section 3.9. Access to Certain Documentation....................18
Section 3.10. Depositor to Furnish Names and Addresses of
Holders to Trustee................................18
Section 3.11. Preservation of Information, Communications
to Holders........................................18
Section 3.12. Reports by Trustee.................................19
ARTICLE IV
Distributions and Reports to Certificateholders
Section 4.1. Distributions......................................19
Section 4.2. Reports to Certificateholders......................19
Section 4.3. Compliance with Withholding Requirements...........20
<PAGE>
Section 4.4. No Charge for Reports to Certificateholders........20
ARTICLE V
The Certificates
Section 5.1. The Certificates...................................20
Section 5.2. Execution, Authentication and Delivery.............23
Section 5.3. Temporary Certificates.............................24
Section 5.4. Registration; Registration of Transfer
and Exchange......................................24
Section 5.5. Mutilated, Destroyed, Lost and Stolen Certificates.26
Section 5.6. Distributions on Certificate; Rights Preserved.....27
Section 5.7. Persons Deemed Owners..............................27
Section 5.8. Cancellation.......................................28
Section 5.9. Global Securities..................................28
Section 5.10. Notices to Depositary..............................28
Section 5.11. Definitive Certificates............................29
Section 5.12. Currency of Distributions in Respect of
Certificates......................................29
Section 5.13. Conditions of Authentication and Delivery
of New Series.....................................30
Section 5.14. Appointment of Paying Agent........................30
Section 5.15. Authenticating Agent...............................31
Section 5.16. Optional Exchange..................................32
ARTICLE VI
The Depositor
Section 6.1. Preparation and Filing of Exchange Act Reports;
Obligations of the Depositor......................32
Section 6.2. Merger or Consolidation of the Depositor...........33
Section 6.3. Limitation on Liability of the Depositor...........34
Section 6.4. Depositor May Purchase Certificates................34
Section 6.5. Preferential Collection of Claims Against
Depositor.........................................34
ARTICLE VII
Concerning the Trustee
Section 7.1. Duties of Trustee; Notice of Defaults..............34
Section 7.2. Certain Matters Affecting the Trustee..............36
Section 7.3. Trustee Not Liable for Recitals in Certificates
or Term Assets....................................37
Section 7.4. Trustee May Own Certificates.......................37
Section 7.5. Trustee's Fees and Expenses; Indemnification;
Undertaking for Costs.............................37
Section 7.6. Eligibility Requirements for Trustee...............38
Section 7.7. Resignation or Removal of the Trustee..............38
Section 7.8. Successor Trustee..................................39
Section 7.9. Merger or Consolidation of Trustee.................39
Section 7.10. Appointment of Co-Trustee or Separate Trustee......39
Section 7.11. Appointment of Office or Agency....................40
Section 7.12. Representations and Warranties of Trustee..........40
Section 7.13. Trustee to Act Only in Accordance With This
Agreement or Pursuant to Instructions of
Certificateholders................................41
<PAGE>
Section 7.14. Accounting and Reports to Certificateholders,
Internal Revenue Service and Others...............41
ARTICLE VIII
Termination
Section 8.1. Termination upon Purchase or Liquidation of
All Term Assets...................................41
ARTICLE X
Miscellaneous Provisions
Section 9.1. Amendment..........................................42
Section 9.2. Counterparts.......................................43
Section 9.3. Limitation on Rights of Certificateholders.........43
Section 9.4. Governing Law......................................43
Section 9.5. Notices............................................43
Section 9.6. Severability of Provisions.........................44
Section 9.7. Notice to Rating Agency............................44
Section 9.8. Grant of Security Interest.........................44
Section 9.9. Nonpetition Covenant...............................45
Section 9.10. No Recourse........................................45
Section 9.11. Article and Section References.....................45
Section 9.12. Conflict with Trust Indenture Act..................45
<PAGE>
BASE TRUST AGREEMENT dated as of August 28, 1997,
between Prudential Securities Structured Assets, Inc., a Delaware
corporation, as Depositor, and The Bank of New York, a New York
banking corporation, as Trustee.
PRELIMINARY STATEMENT
The Depositor and the Trustee have duly authorized the
execution and delivery of this Base Trust Agreement to provide
for one or more Series (and one or more Classes within each such
Series) of Trust Certificates, issuable from time to time as
provided in this Agreement. Each such Series (or each Class
within such Series) of Certificates will be issued only under a
separate Series Supplement to this Agreement duly executed and
delivered by the Depositor, if any, specified in the applicable
Series Supplement, and the Trustee. All representations,
covenants and agreements made herein by each of the Depositor and
the Trustee are for the benefit and security of the
Certificateholders and, to the extent provided in the applicable
Series Supplement, for the benefit and security of any Credit
Support Provider. The Depositor is entering into this Agreement,
and the Trustee is accepting the trusts created hereby, for good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged. All terms defined herein shall have
meanings solely with respect to the particular Series Supplement
in which these provisions are incorporated. Incorporation of
these provisions into a Series Supplement is for convenience
only, and each Trust created by a Series Supplement shall be a
legally separate and distinct Trust from any other Trust created
by any other Series Supplement into which these provisions may
also be incorporated. These provisions shall by themselves be of
no force and effect, and shall only have effect as and to the
extent incorporated by reference in a Series Supplement. The
Series Supplement into which this Base Trust Agreement is
incorporated by reference shall together constitute a single
trust agreement and are referred to herein as the "Trust
Agreement". In the event of a conflict between any Series
Supplement, including the Terms Schedule attached thereto, and
this Base Trust Agreement, the Series Supplement shall control.
ARTICLE I
Definitions and Assumptions
Section 1.1. Definitions. Except as otherwise
specified herein or in the applicable Series Supplement or as the
context may otherwise require, the following terms have the
respective meanings set forth below for all purposes of this
Agreement.
"Account": As defined in Section 3.4.
"Accounting Date": With respect to any Series, if
applicable, as defined in the related Series Supplement.
"Affiliate": With respect to any specified Person, any
other Person directly or indirectly controlling or controlled by
or under direct or indirect common control with such specified
Person. For the purposes of this definition, "control", when used
with respect to any specified Person, means the power to direct
the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement": With respect to any Series of
Certificates, this Trust Agreement and all amendments hereof and,
unless the context otherwise requires, the related Series
Supplement.
"Authenticating Agent": As defined in Section 5.15.
"Authorized Newspaper": A newspaper in an official
language of the country of publication customarily published at
least once a day, and customarily published for at least five
days in each calendar week, and of general circulation in such
city or cities specified pursuant to Section 5.1 with respect to
the Certificates of any Series. Where successive publications are
required to be made in Authorized Newspapers, the successive
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publications may be made in the same or in different newspapers
in the same city meeting the foregoing requirements and in each
case on any Business Day in such city.
"Available Funds": Unless otherwise specified in the
applicable Series Supplement, for any Distribution Date in
respect of a given Series or Class, the sum of (i) all amounts
actually received on or with respect to the Term Assets
(including Liquidation Proceeds and investment income on amounts
in the Accounts) with respect to such Series during the related
Collection Period, (ii) all amounts received pursuant to any
Credit Support Instruments with respect to such Series for such
Distribution Date and (iii) all other amounts, if any, specified
by the applicable Series Supplement; in each case, only to the
extent that such amounts are same day funds.
"Basic Documents": With respect to any Series, if
applicable, as defined in the related Series Supplement.
"Board of Directors": Either the Board of Directors of
the Depositor or any executive or committee of such Board duly
authorized under applicable law to act on behalf of such Board.
"Board Resolution": A copy of a resolution certified
by the Secretary or an Assistant Secretary of the Depositor to
have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification and
delivery to the Trustee.
"Business Day": With respect to any Place of
Distribution specified pursuant to Section 5.1, any day that is
not a Saturday or a Sunday or a day on which banking institutions
or trust companies in such Place of Distribution are authorized
or obligated by law, regulation or executive order to close.
"Calculation Agent": With respect to each Series, as
defined in the related Series Supplement.
"Certificate Account": As defined in Section 3.3.
"Certificate Owners": As defined in Section 5.9.
"Certificate Principal Balance": With respect to an
Outstanding Certificate, as determined at any time, the maximum
amount that the Holder thereof is entitled to receive as
distributions allocable to principal payments on the Term Assets.
The Certificate Principal Balance, if any, of any Class within a
given Series (other than those Classes, if any, specified in the
related Series Supplement), as of any date of determination,
shall be equal to the aggregate initial Certificate Principal
Balance thereof less the sum of all amounts allocable to prior
distributions made to such Class in respect of principal of the
Term Assets.
"Certificate Register" and "Certificate Registrar": As
respectively defined in Section 5.4.
"Certificateholder": Any Holder of a Certificate.
"Certificates": Any Trust Certificates authorized by,
and authenticated and delivered under, this Agreement.
"Class": With respect to any Series, any one of the
classes of Certificates of such Series, each consisting of
Certificates having identical terms.
"Closing Date": With respect to any Series, the day on
which Certificates of such Series are first executed, authenticated
and delivered.
"Code": The Internal Revenue Code of 1986, as amended,
and Treasury Regulations promulgated thereunder.
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"Collection Period": With respect to any Distribution Date
for a Series (or Class within such Series), the period specified
in the related Series Supplement.
"Commission": The U.S. Securities and Exchange Commission.
"Corporate Trust Office": The principal corporate
trust office of the Trustee located at the address set forth in
the related Series Supplement or such other addresses as the
Trustee may designate from time to time by notice to the Holders
and the Depositor, or the principal corporate trust office of any
successor Trustee (or such other addresses as a successor Trustee
may designate from time to time by notice to the Holders and the
Depositor).
"Credit Support": With respect to any Series (or any
Class within such Series), a letter of credit, surety bond, swap
agreement, put or call option or other asset intended to support
or ensure the timely or ultimate distributions of amounts due in
respect of all or certain of the Term Assets for such Series or
Class, which in each case is specified as such in the related
Series Supplement. The Credit Support for any such Series or the
related Trust shall not constitute a Credit Support for any other
Series or any other Trust
"Credit Support Instrument": The instrument or
document pursuant to which the Credit Support for a given Series
(or any Class within such Series) is provided, as specified in
the applicable Series Supplement.
"Credit Support Provider": With respect to any Series
(or any Class within such Series), the Person, if any, that will
provide any Credit Support with respect to all or a portion of
the Term Assets for such Series or Class as specified in the
applicable Series Supplement.
"Currency": Dollars or Foreign Currency.
"Cut-off Date": With respect to any Series, the date
specified as such in the related Series Supplement. For purposes
of this Agreement, any Term Asset acquired by the Depositor after
the applicable Cutoff Date but prior to the applicable Closing
Date and included in the related Trust as of such Closing Date
shall be deemed to have been Outstanding as of such Cut-off Date
and references to the principal balance of such Term Asset as of
such Cut-off Date shall be deemed to be to the principal balance
of such Term Asset as of the date on which it was acquired by the
Depositor.
"Definitive Certificates": As defined in Section 5.9.
"Deleted Term Asset": A Term Asset replaced or to be
replaced by a Qualified Substitute Term Asset.
"Deliver" (and with correlative meaning, "delivers,"
"delivery" or "delivered"): when used with respect to any security:
(a) with respect to any security that is a
"certificated security" (as defined in Section 8-102 of the UCC)
transfer thereof:
(i) by physical delivery of such certificated
security to the Trustee, provided that if the certificated
security is in registered form, it shall be indorsed to, or
registered in the name of, the Trustee or indorsed in blank;
(ii) by physical delivery of such certificated
security, provided that it is in registered form, to an
Intermediary of the Trustee that is not a "clearing corporation"
(as defined in Section 8-102 of the UCC) specially indorsed to
the Trustee and thereafter reregistered in the name of the
Trustee; or
(iii) the crediting by an Intermediary of such
certificated security to a securities account of the Trustee and,
to the extent required by applicable law, the sending by such
Intermediary, if not a
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clearing corporation, of a confirmation of the purchase of such
security and the identification by such Intermediary by book
entry of the security as belonging to the Trustee;
(b) with respect to any security that is either a
certificated security or an uncertificated security (each, as
defined in Section 8-102 of the UCC) credited on the books of a
clearing corporation, transfer thereof:
(i) by the crediting of such security to (i) a
securities account of the Trustee or (ii) a securities account of
an Intermediary of the Trustee and the crediting by such
Intermediary of such security to a securities account of the
Trustee; and
(ii) to the extent required by applicable law,
(A) in the case of a security (1) that is
a certificated security, by the custody of such security
by the clearing corporation or a custodian or a nominee
of either subject to the control of the clearing corporation
and such security being in bearer form or indorsed in
blank by an appropriate person or registered in the name of the
clearing corporation or custodian or a nominee of either, and (2)
that is an uncertificated security, by the registration of such
security in the name of a clearing corporation or a custodian or
nominee of either and
(B) by (1) the making of appropriate entries
on the books of the clearing corporation reducing the account of a
transferor on the books of the clearing corporation and increasing
the account of the Trustee or its designee, if any (which shall be
an Intermediary), by the amount of the obligation or the number of
shares or rights transferred, (2) the sending by the designee, if any,
to the Trustee of confirmation of the purchase of such security by
the Trustee and (3) the identification by such Intermediary by book
entry of such security as belonging to the Trustee;
(c) with respect to any security that is a security
maintained in the form of an entry in the records of a Federal
Reserve Bank, (x) the crediting by such Federal Reserve Bank in
its records of such security to the securities account of the
Intermediary and (y) the crediting by such Intermediary of such
security to a securities account of the Trustee;
(d) with respect to any security that is an uncertificated
security and that is not governed by clause (b) or (c) above, transfer
thereof
(i) by registration of the transfer thereof to the
Trust, on the books and records of the issuer thereof; or
(ii) by the crediting by an Intermediary of such
security to a securities account of the Trustee and, to the
extent required by applicable law, the sending by such
Intermediary of a confirmation of the purchase of such security
and the identification by such Intermediary by book entry of the
security as belonging to the Trustee;
(e) with respect to any "instrument" within the
meaning of Section 9-105(a)(9) of the UCC (other than
certificated securities) that is susceptible of physical
delivery, transfer thereof to the Trust by physical delivery to
the Trustee, indorsed to the Trustee or its nominee or indorsed
in blank; and
(f) with respect to any deposit account with a
commercial bank located in New York, the establishment of such
account in the name of the Trustee, with the funds in such
account payable at maturity to an account of the Trustee.
Notwithstanding the foregoing, with respect to each of
the provisions of paragraphs (a) through (e), delivery may be
effected by such additional or alternative procedures as may
hereafter become appropriate to effect the complete transfer of
ownership of any such security to the Trustee free and clear of
any adverse claims, consistent with changes in applicable law or
regulation or the interpretation thereof.
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"Depositary": With respect to the Certificates of any
Series (or Class within such Series) issuable in whole or in part
in the form of one or more Global Securities, the Person designated
as Depositary by the Depositor pursuant to Section 5.1 until a
successor Depositary shall have become such pursuant to the
applicable provisions of this Agreement, and thereafter
"Depositary" shall mean or include each Person who is then a
Depositary hereunder, and if at any time there is more than one
such Person, "Depositary" as used with respect to the
Certificates of any such Series or Class shall mean the
Depositary with respect to the Certificates of that Series or
Class.
"Depositor": Prudential Securities Structured Assets,
Inc., a Delaware corporation, and, if a successor Person shall
have become the Depositor pursuant to any applicable provisions
of this Agreement, "Depositor" shall mean such successor Person.
"Depositor Order" or "Depositor Request": A written
order or request, respectively, signed in the name of the
Depositor by any two of its Chief Executive Officer, Chief
Financial Officer, Chief Operating Officer, President, a Vice
President, its Treasurer, an Assistant Treasurer, its Secretary
or an Assistant Secretary and delivered to the Trustee; provided
that (i) any such order or request shall be signed by either the
President or a Vice President and (ii) no person may sign in a
dual capacity.
"Depository Agreement": If applicable, the agreement
pursuant to which the Depositary will agree to act as Depositary
with respect to any Series (or Class within such Series) of
Certificates in accordance with Section 5.9.
"Distribution Date": With respect to any Series (or
Class within such Series) of Certificates, each date specified as
a "Distribution Date" for such Series (or Class) in the related
Series Supplement.
"Dollar" or "$" or "USD": Such currency of the United
States as at the time of payment is legal tender for the payment
of public and private debts.
"Eligible Account": Either (i) an account or accounts
maintained with a Federal or State chartered depository
institution or trust company the long term unsecured debt
obligations of which are rated by the Rating Agency the higher of
(w) at least the then current long-term rating of the Term Assets
or (x) in one of its two highest long-term rating categories
(unless otherwise specified in the Series Supplement) at the time
any amounts are held in deposit therein or (ii) a trust account
or accounts maintained as a segregated account or as segregated
accounts and held by a Federal or State chartered depository
institution or trust company in trust for the benefit of the
Certificateholders, provided, however, that such depositary
institution or trust company (y) has a long-term rating in one of
the four highest categories by the Rating Agency or (z) is the
Trustee.
"Exchange Act": The Securities Exchange Act of 1934, as
amended.
"Exchange Act Reports": As defined in Section 6.1 hereof.
"Exchange Rate Agent": With respect to any Series (or
Class within such Series) of Certificates, if applicable, the
Depositor or its agent so specified in the related Series
Supplement.
"Executive Officer": With respect to any corporation
other than the Trustee, the Chief Executive Officer, Chief
Operating Officer, Chief Financial Officer, President, any Vice
President, the Secretary or the Treasurer of such corporation;
with respect to the Trustee, any Vice President, any Assistant
Vice President or any Assistant Treasurer; with respect to any
partnership, any general partner thereof.
"Foreign Currency": A currency issued by the
government of any country other than the United States or a
composite currency the value of which is determined by reference
to the values of the currencies of any group of countries.
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"Global Security": A Certificate evidencing all or part of
a Series (or Class within such Series) of Certificates, issued to
the Depositary for such Series or Class in accordance with
Section 5.9 and bearing the legend prescribed therein.
"Grant": To sell, convey, assign, transfer, deposit,
set over and confirm to the Trustee pursuant to this Agreement
and a related Series Supplement; and the terms "Granted" and
"Granting" have the meanings correlative to the foregoing. A
Grant of any Term Assets or of any other instrument shall include
all rights, powers and options (but none of the obligations) of
the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt
for principal, premium, if any, and interest payments in respect
of such Term Assets and all other moneys payable thereunder, to
give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options,
to bring Proceedings in the name of the Granting party or
otherwise, and generally to do and receive anything that the
Granting party is or may be entitled to do or receive thereunder
or with respect thereto.
"Holder": The registered holder of a Certificate.
"In-Kind Distribution": A distribution by the Trustee
of certain Term Assets pursuant to Section 3.6 hereof and the
Series Supplement.
"Independent": When used with respect to any specified
Person means that the Person specifies he or she (1) is in fact
independent of the Depositor and of any Affiliate of the
Depositor, (2) does not have any direct or indirect financial
interest in the Depositor or in any Affiliate of the Depositor
that is material with respect to such Person and (3) is not
connected with the Depositor, as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing
similar functions.
"Independent Certificate" means a certificate of an
Independent Person, as required by the TIA.
"Institutional Accredited Investor" means an
institutional "accredited investor" as defined in Rule 501(a)(1),
(2), (3) or (7) of Regulation D under the Securities Act.
"Intermediary" shall mean a clearing corporation or a
person, including a bank or broker, that in the ordinary course
of its business maintains securities accounts for others and is
acting in that capacity.
"Investment Company Act" means the Investment Company Act
of 1940, as amended.
"Letter of Credit": With respect to any Series or
Class within such Series, the letter of credit, if any, providing
for the payment of all or a portion of amounts due in respect of
such Series or Class, issued to the Trustee for the benefit of
the Holders of such Series or Class, issued by the related Credit
Support Provider, all as specified in the related Series
Supplement.
"Limited Guarantor": With respect to the Term Assets
relating to any Series (or Class within such Series), a Person
specified in the related Series Supplement as providing a
guarantee or insurance policy or other credit enhancement
supporting the distributions in respect of such Series (or Class)
as and to the extent specified in such Series Supplement.
"Limited Guaranty": With respect to any Series or
Class within such Series, any guarantee of or insurance policy or
other comparable form of credit enhancement with respect to
amounts required to be distributed in respect of such Series or
Class or payments under all or certain of the Term Assets
relating to such Series or Class, executed and delivered by a
Limited Guarantor in favor of the Trustee, for the benefit of the
Certificateholders, as specified in the related Series
Supplement.
"Liquidation Proceeds": The amounts received by the
Trustee in connection with the repurchase, substitution or sale of
a Term Asset.
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"Notional Amount": With respect to any Class of
Certificates, if applicable, the initial notional amount
specified in the related Series Supplement on which distributions
of interest may be determined at the applicable interest rate
payable on the Term Assets.
"Officer's Certificate": A certificate signed by any
one (or, if specified in this Agreement or any Series Supplement,
more than one) Executive Officer of the Depositor or, in the case
of the Trustee, a Responsible Officer.
"Opinion of Counsel": A written opinion of counsel,
who may, except as otherwise expressly provided in this
Agreement, be counsel for the Depositor acceptable to the
Trustee, except that any opinion of counsel relating to (i)
federal income tax characterization, (ii) the Investment Company
Act, and (iii) the qualification of any account required to be
maintained pursuant to this Agreement as an Eligible Account must
state that it is an opinion of counsel who is in fact Independent
of the Depositor.
"Outstanding": With respect to Certificates of a
specified Series (or Class within such Series), as of any date of
determination, all such Certificates theretofore authenticated
and delivered under this Agreement and the related Series
Supplement except:
(i) Certificates theretofore canceled by the
Certificate Registrar or delivered to the Certificate
Registrar for cancellation or lost or missing Certificates,
in exchange for which no new Certificates have been issued,
but with respect to which final payment has been made; and
(ii) Certificates in exchange for or in lieu of which
other Certificates have been authenticated and delivered
pursuant to this Agreement, unless proof satisfactory to
the Trustee is presented that any such Certificates are
held by a bona fide purchaser in whose hands such
Certificates are valid obligations of the Trust;
provided, however, that in determining whether the Holders of the
required percentage of the aggregate Voting Rights of the
Certificates have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Certificates
beneficially owned by the Depositor, or any Affiliate thereof,
shall be disregarded and deemed not to be Outstanding, and the
Voting Rights to which its Holder would otherwise be entitled
shall not be taken into account in determining whether the
requisite percentage of aggregate Voting Rights necessary to
effect any such consent or take any such action has been obtained
except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only
Certificates with respect to which the Depositor has provided the
Trustee an Officer's Certificate stating that such Certificates
are so owned shall be so disregarded. Certificates so owned that
have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee by
certifying to such effect in an Officer's Certificate the
pledgee's right so to act with respect to such Certificates and
that the pledgee is not, to the actual knowledge of the Trustee
without any duty of investigation, the Depositor or any Affiliate
thereof so owned.
"Participant": A broker, dealer, bank, other financial
institution or other Person for whom from time to time a
Depositary effects book-entry transfers and pledges of securities
deposited with the Depositary.
"Paying Agent": As defined in Section 5.14.
"Percentage Interest": With respect to a Certificate
of any Series or Class within a Series, the portion of such
Series or Class evidenced by such Certificate, expressed as a
percentage, equal to the product of (x) a fraction, the numerator
of which is the initial Certificate Principal Balance or Notional
Amount, as applicable, represented by such Certificate and the
denominator of which is the aggregate initial Certificate
Principal Balance or Notional Amount, as applicable, of all the
Certificates of such Series or Class and (y) 100.
"Permitted Investments": With respect to any Series,
unless otherwise specified in the related Series Supplement, any
one or more of the following obligations or securities, provided
that the total return
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specified by the terms of each such obligation or security is at
least equal to the purchase price thereof and that such
Obligations, by their terms, convert into cash within a finite
period of time:
(i) direct obligations of, and obligations fully
guaranteed by, the United States, the Federal Home Loan
Mortgage Corporation, the Federal National Mortgage
Association, the Federal Farm Credit System or any agency
or instrumentality of the United States the obligations of
which are backed by the full faith and credit of the United
States of America; provided that obligations of, or
guaranteed by, the Federal Home Loan Mortgage Corporation,
the Federal National Mortgage Association or the Federal
Farm Credit System shall be Permitted Investments only if,
at the time of investment, it has the rating specified in
such Series Supplement for Permitted Investments;
(ii) demand and time deposits in, certificates of
deposit of, or banker's acceptances issued by any
depository institution or trust company (including the
Trustee or any agent of the Trustee acting in their
respective commercial capacities) incorporated under the
laws of the United States or any State and subject to
supervision and examination by Federal and/or State banking
authorities so long as the commercial paper and/or the
short-term debt obligations of such depository institution
or trust company (or, in the case of a depository
institution which is the principal subsidiary of a holding
company, the commercial paper or other short-term debt
obligations of such holding company) at the time of such
investment or contractual commitment providing for such
investment have the rating specified in such Series
Supplement for Permitted Investments; provided, however,
that such rating shall be no lower than the rating on the
Term Assets at the time of purchase of the investments;
(iii) securities bearing interest or sold at a
discount issued by any corporation incorporated under the
laws of the United States or any State that have the rating
specified in such Series Supplement for Permitted
Investments at the time of such investment or contractual
commitment providing for such investment; provided,
however, that such rating shall be no lower than the rating
on the Term Assets; provided, further, that securities
issued by any particular corporation will not be Permitted
Investments to the extent that investment therein will
cause the then outstanding principal amount of securities
issued by such corporation and held as part of the Trust
for such Series to exceed 10% of the aggregate outstanding
principal balances and amounts of all the Term Assets and
Permitted Investments held as part of the Trust for such
Series; and
(iv) commercial paper having at the time of such
investment the rating specified in the Series Supplement
for Permitted Investments.
"Person": Any individual, corporation, partnership,
joint venture, association, joint stock company, limited
liability company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Distribution": With respect to any Series
(or Class within such Series) of Certificates, the place or
places where the principal of (and premium, if any) and interest
on the Certificates of such Series (or Class) are distributable
as specified pursuant to Section 5.1.
"Predecessor Certificate": With respect to any
particular Certificate, every previous Certificate evidencing all
or a portion of the same interest as that evidenced by such
particular Certificate; and, for the purpose of this definition,
any Certificate authenticated and delivered under Section 5.5 in
lieu of a lost, destroyed or stolen Certificate shall be deemed
to evidence the same interest as the lost, destroyed or stolen
Certificate.
"Proceeding": Any suit in equity, action at law or
other judicial or administrative proceeding.
"Purchase Price": With respect to any Term Asset
required to be repurchased by the Depositor pursuant to Sections
2.3 or 2.5 and as confirmed by an Officer's Certificate from the
Depositor to the Trustee, an amount equal to the sum of (i) 100%
of the principal balance (if any) thereof as of the date of such
repurchase, (ii) accrued and unpaid interest thereon from the
immediately preceding interest payment date on the Term Asset, or if
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no interest has been paid to the Trust with respect thereto, from
the Cut-Off Date, in each case adjusted, if applicable, to the
rate at which interest on such Term Asset is distributable to the
applicable Certificateholder, as specified in the applicable
Series Supplement, on the principal balance of such Term Asset as
of the close of business on the Business Day immediately
preceding the date of purchase or such other day as may be
specified in the applicable Series Supplement on which such
purchase is to occur, (iii) expenses reasonably incurred or to be
incurred by the Trustee in respect of the breach or defect giving
rise to the purchase obligation, including any expenses arising
out of the enforcement of the purchase obligation and (iv) any
realized losses previously incurred with respect to such Term
Asset and allocated to Certificateholders on or before the date
of purchase. Notwithstanding the foregoing, if the Term Asset was
a zero coupon bond, a discount security, or an interest-only
security, the Purchase Price shall be as defined in the Series
Supplement.
"Qualified Substitute Term Asset": With respect to any
Series and any Term Asset, as defined in the Series Supplement.
"Rating Agency": With respect to any Series (or Class
within such Series), as defined in the related Series Supplement.
"Rating Agency Condition": With respect to any action
or occurrence, unless otherwise specified in the applicable
Series Supplement, that each Rating Agency shall have been given
10 days (or such shorter period acceptable to each Rating Agency)
prior notice thereof and that each Rating Agency shall have
notified the Depositor, the Trustee in writing that such action
or occurrence will not result in a reduction or withdrawal of the
then current rating of any Certificate of the applicable Series.
"Record Date": With respect to any Distribution Date
for any Series (or Class within such Series) of Certificates, the
date specified in the related Series Supplement.
"Required Interest": Unless otherwise specified in the
related Series Supplement, with respect to the Outstanding
Certificates of any Series or any Class thereof, the accrued and
undistributed interest on the Certificate Principal Balance or
Notional Amount of such Outstanding Certificates computed at the
applicable Pass Through Rate.
"Required Percentage--Amendment": Unless otherwise
specified in the related Series Supplement, 66-2/3% of the
aggregate Voting Rights of Certificates of such Series (or of a
designated Class or group of Classes within such Series) (either
voting as separate Classes or as a single Class) applicable to
such matter, all as specified in the applicable Series
Supplement.
"Required Percentage--Definitive Certificates": Unless
otherwise specified in the related Series Supplement, greater
than 50% of the aggregate Voting Rights of Certificates of such
Series.
"Required Percentage--Direction of Trustee": Unless
otherwise specified in the related Series Supplement, greater
than 50% of the aggregate Voting Rights of Certificates of such
Series.
"Required Percentage--Remedies": Unless otherwise
specified in the related Series Supplement, 66-2/3% of the
aggregate Voting Rights of Certificates of such Series.
"Required Percentage--Removal of Trustee": Unless
otherwise specified in the related Series Supplement, greater
than 50% of the aggregate Voting Rights of Certificates of such
Series.
"Required Principal": As determined for any
Distribution Date for a given Series (or Class within such
Series), unless otherwise specified in the related Series
Supplement, the amounts on deposit in the Certificate Account
allocable to principal payments on the Term Assets and required
to be distributed in respect of Certificates of such Series (or
Class) in accordance with the terms of such Certificates and such
related Series Supplement.
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"Required Rating": With respect to any Series (or
Class within such Series), the rating category (or categories)
specified in the Series Supplement that, as a condition to the
issuance of such Series or Class or the subsequent sale of such
securities in an offering registered under the Securities Act, is
(or are) the lowest category (or categories) in which the
Certificates of such Series or Class may be categorized by the
Rating Agency.
"Requisite Reserve Amount": As of any date with
respect to any Series (or Class within such Series) of
Certificates, the amount, if any, required to be maintained in
the Reserve Account, if any, for such Series or Class as
specified in or determined pursuant to the related Series
Supplement.
"Reserve Account": An Eligible Account, if any, created
and maintained for the purposes described in Section 3.5.
"Responsible Officer": With respect to the Trustee,
any officer within the Corporate Trust Office of the Trustee,
including any Vice President, Assistant Vice President, Assistant
Treasurer, Assistant Secretary or any other officer of the
Trustee, as have been assigned to the administration of the
Trust.
"Retained Interest": If applicable, with respect to
any Term Asset, an ownership interest in and a right to a portion
of the payments thereon by the obligor thereof, as specified in
the Term Assets Schedule to the related Series Supplement, held
by the Person so specified in such Term Assets Schedule.
"Rule 144A" means Rule 144A under the Securities Act.
"Section 3a-7" means Rule 3a-7 under the Investment
Company Act.
"Securities Act" means the Securities Act of 1933, as
amended.
"Scheduled Final Distribution Date": With respect to
any Certificate, the date on which all the unpaid principal of
(and premium, if any, on) such Certificate is scheduled, without
giving effect to any prepayment, exchange or early termination,
to become due and payable as provided therein and in the
applicable Series Supplement.
"Series": A separate series of Certificates issued
pursuant to this Agreement and a related Series Supplement, which
series may be divided into two or more Classes, as provided in
such Series Supplement.
"Series Supplement": An agreement supplemental to this
Agreement that authorizes the issuance of a particular Series
(and each Class within such Series) of Certificates.
"Specified Currency": As defined in the related Series
Supplement.
"State": Any one of the 50 states of the United States
or the District of Columbia.
"Surety Bond": If so specified in the Series
Supplement, with respect to any Series (or Class within such
Series) of Certificates, the surety bond providing for the
distribution under certain circumstances specified in such Series
Supplement of amounts to the Certificateholders of such Series
(or Class), which surety bond will be issued to the Trustee for
the benefit of such Certificateholders by the related Credit
Support Provider, all as specified in such Series Supplement.
"Term Assets": With respect to any Series, the asset
or assets Granted as part of the Trust for such Series or
acquired (or, in the case of an agreement, entered into) by the
Trustee for the benefit of the Holders of such Series and, if and
to the extent provided in the applicable Series Supplement, for
the benefit of any Credit Support Provider, all as identified in
the Term Assets Schedule to the related Series Supplement. The
Term Assets for any such Series or the related Trust shall not
constitute Term Assets for any other Series or any other Trust.
"Term Asset Issuer": As defined in the related Series
Supplement.
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"Term Assets Schedule": With respect to any Series, a
listing of the Term Assets for such Series as of the Closing
Date, including, with respect to each Term Asset, the obligor and
the principal balance thereof, which shall be attached to such
Series Supplement as Schedule A.
"TIA": The Trust Indenture Act of 1939, as amended.
"Trust": With respect to any Series, the segregated
asset or pool of assets subject hereto, constituting the trust
created hereby and by the related Series Supplement and to be
administered hereunder and thereunder, consisting of those Term
Assets and the Credit Support, if applicable, and all sums
distributed in respect thereof that are specified as being part
of the Trust for such Series in the related Series Supplement,
all for the benefit of the Certificateholders of such Series as
of any particular time.
"Trust Asset Instrument": Any instrument or agreement
evidencing a Term Asset or a Credit Support Instrument.
"Trustee": With respect to any Series, the Person so
specified in the applicable Series Supplement (which Person shall
have agreed pursuant to such Series Supplement to assume all the
duties, obligations, responsibilities and liabilities of the
Trustee as set forth in this Agreement and such Series Supplement
with respect to the related Series of Certificates) for such
Series or any co-trustee appointed pursuant to Section 7.10,
until a successor Person shall have become the Trustee pursuant
to the applicable provisions of this Agreement and the applicable
Series Supplement, and thereafter "Trustee" shall mean such
successor Person.
"Trust Termination Event": With respect to any Series,
as specified in the related Series Supplement.
"UCC" means the Uniform Commercial Code as in effect
in the State of New York, as amended from time to time.
"United States": The United States of America
(including the States), its territories, its possessions and
other areas subject to its jurisdiction.
"Voting Rights": With respect to any Series (or Class
within such Series) of Certificates, the portion of the aggregate
voting rights of the Certificates of such Series or Class which
shall be allocated to any Certificate as specified in the
applicable Series Supplement.
Section 1.2. Rules of Construction. Unless the context
otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the
meaning to it in accordance with generally accepted
accounting principles as in effect in the United States
from time to time;
(iii) "or" is not exclusive;
(iv) the words "herein", "hereof", "hereunder" and
other words of similar import refer to this Agreement as a
whole and not to any particular Article, Section or other
subdivision;
(v) "including" means including without limitation; and
(vi) words in the singular include the plural and words
in the plural include the singular.
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ARTICLE II
Declaration of Trusts; Issuance of Certificates
Section 2.1. Creation and Declaration of Trusts;
Assignment of Term Assets. (a) The Depositor, concurrently with
the execution and delivery hereof, does hereby agree to Grant to
the Trustee, on behalf and for the benefit of the
Certificateholders of each given Series of Certificates and
without recourse, all the right, title and interest of the
Depositor, including any security interest therein for the
benefit of the Depositor, in, to and under the Term Assets
attributable to each such Series (except for the Term Assets
attributable to such Series which are not Granted by the
Depositor, as specified in the Term Assets Schedule to the
applicable Series Supplement), now existing or hereafter
acquired, in each case as identified on the applicable Term
Assets Schedule, and all other assets included or to be included
in the respective Trust for the benefit of the Certificateholders
of each such Series. Each such Grant will include all interest,
premium (if any) and principal received by or on behalf of the
Depositor of, on or with respect to any such Term Assets due
after the applicable Cut-off Date, and, unless otherwise
specified in the Series Supplement, will exclude (i) all
interest, premium (if any) and principal of, on or with respect
to any such Term Assets due on or before the applicable Cut-off
Date and (ii) any Retained Interest in any such Term Asset.
(b) In connection with each Grant referred to in the
preceding paragraph, the Depositor shall, not later than the
applicable Closing Date, (i) deposit the Term Assets for a given
Series with the Trustee by Delivery of such Term Assets.
(c) Unless otherwise specified in the applicable
Series Supplement, the Grant of such Term Assets by the Depositor
for a given Series accomplished hereby and by such Series
Supplement is absolute and is intended by the parties hereto as a
sale.
Section 2.2. Acceptance by Trustee. (a) With respect
to each Series, the Trustee will acknowledge receipt by it, or by
a custodian on its behalf, of the related Term Assets and the
related documents referred to in Section 2.1, now existing or
hereafter acquired, and declares that it will hold such Term
Assets and documents and all other documents delivered to it
pursuant to this Agreement, and that it will hold all such assets
and such other assets comprising the Trust for a given Series of
Certificates, in trust for the exclusive use and benefit of all
present and future Certificateholders of such Series and for the
purposes and subject to the terms and conditions set forth in
this Agreement.
(b) The Trustee, or a custodian on its behalf, shall
review all documents received by it pursuant to Section 2.1
within 45 days after receipt thereof. If in the process of
reviewing such documents the Trustee or such custodian discovers
any document or documents to be missing or defective, the Trustee
shall promptly (but in any event within 10 Business Days) so
notify the Depositor.
Section 2.3. Repurchase or Substitution of Certain
Term Assets . (a) Except to the extent provided for in a Series
Supplement relating to a given Series of Certificates, upon
discovery or receipt of notice pursuant to Section 2.2 that a
Trust Asset Instrument is missing or defective, the Trustee shall
immediately notify the Depositor and the Rating Agency that such
document is defective or missing and, unless the Depositor
provides to the Trustee an Officer's Certificate stating such
missing or defective document will not have a materially adverse
effect on the related Trust, the Depositor shall cure such defect
within 60 days from the date on which it was first notified of
such missing document or defect, and if the Depositor does not
deliver such missing document or cure such defect in all material
respects during such period, the Depositor shall repurchase such
Term Asset from the Trustee at the applicable Purchase Price
within 75 days after the date on which it was first notified of
such missing document or defect. The Purchase Price for the
repurchased asset underlying the defective or missing Trust Asset
Instrument shall be delivered to the Trustee directly for deposit
in the Certificate Account and the Trustee, upon receipt of such
deposit, shall release to the Depositor the related documents in
its possession and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall
be necessary to vest in the Depositor any such asset released
pursuant hereto, and the Trustee shall have no further
obligations with regard to such documents.
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Any such repurchase price will be distributed to
Certificateholders of the related Series or Class as described in
the related Series Supplement. The foregoing notwithstanding, if
and to the extent the Series Supplement provides, the Depositor
may, as an alternative to repurchasing any such Term Asset as
provided above, cause such Term Asset to be removed from the
Trust (in which case it shall become a Deleted Term Asset) by
agreeing to substitute, within the time period set forth above,
one or more Qualified Substitute Term Assets in the manner and
subject to the limitations set forth in Section 2.3(b) and the
related Series Supplement. It is understood and agreed that the
obligation of the Depositor to repurchase or substitute for any
Term Asset as to which a constituent document is missing or a
defect in a constituent document exists shall, if such defect is
not cured or such missing document is not provided, constitute
(unless otherwise specified in the applicable Series Supplement)
the sole remedy respecting such omission or defect available to
the Certificateholders or the Trustee on behalf of the
Certificateholders.
(b) If and to the extent provided for in a Series
Supplement relating to a given Series of Certificates, with
respect to any Deleted Term Asset for which the Depositor
substitutes a Qualified Substitute Term Asset or Assets, such
substitution shall be effected by the Depositor delivering to the
Trustee or a custodian on its behalf such Qualified Substitute
Term Asset or Assets and such documents and agreements, with all
necessary endorsements thereon, as would be required under the
terms of Section 2.1, together with an Officer's Certificate of
the Depositor certifying that each such Qualified Substitute Term
Asset satisfies the definition thereof and the requirements under
this Section. The Trustee or such custodian shall acknowledge
receipt of such Qualified Substitute Term Asset or Assets and,
within five Business Days thereafter, review such documents in
the manner specified in Section 2.2. The Depositor shall give or
cause to be given written notice to the Certificateholders of
such Series and the Rating Agency that such substitution has
taken place and shall amend the Term Asset Schedule to reflect
the removal of such Deleted Term Asset from the terms of this
Agreement and the substitution of the Qualified Substitute Term
Asset or Assets. Upon such substitution, such Qualified
Substitute Term Asset or Assets shall be subject to the terms of
this Agreement in all respects, including those related to the
representations and warranties as of the date of substitution.
Any further terms upon which such substitution may be effected
shall be specified in the applicable Series Supplement.
Section 2.4. Representations and Warranties of the
Depositor . The Depositor hereby represents and warrants to the
Trustee that as of the Closing Date or as of such other date
specifically provided herein or in the applicable Series
Supplement:
(a) the Depositor is a corporation duly organized,
validly existing and in good standing under the laws
of the State of Delaware;
(b) with respect to each Series Supplement, to the
Depositor's knowledge, the information set forth in the
Term Asset Schedule with respect to each Term Asset is true
and correct in all material respects at the date or dates
respecting which such information is furnished;
(c) the execution and delivery of this Agreement by
the Depositor and its performance of and compliance with
the terms of this Agreement will not violate the
Depositor's certificate of incorporation or by-laws or
constitute a default (or an event which, with notice or
lapse of time, or both, would constitute a default) under,
or result in the breach or acceleration of, any material
contract, agreement or other instrument to which the
Depositor is a party or which may be applicable to the
Depositor or any of its assets;
(d) the Depositor has the full power and authority to
enter into and consummate all transactions contemplated by
this Agreement, has duly authorized the execution, delivery
and performance of this Agreement and has duly executed and
delivered this Agreement. This Agreement, upon its
execution and delivery by the Depositor and assuming due
authorization, execution and delivery by the Trustee, will
constitute a valid, legal and binding obligation of the
Depositor, enforceable against it in accordance with the
terms hereof, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, receivership,
moratorium or other laws relating to or affecting the
rights of creditors generally, and by
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general equity principles (regardless of whether such
enforcement is considered a proceeding in equity or
at law);
(e) the Term Assets are owned by the Depositor free
and clear of any right, charge, security interest or lien
or claim and the Depositor has the right to Grant the
applicable Term Assets to the Trustee;
(f) the Depositor is not in violation, and the
execution and delivery of this Agreement by the Depositor
and its performance and compliance with the terms of this
Agreement will not constitute a violation, of any order or
decree of any court or any order or regulation of any
Federal, State, municipal or governmental agency having
jurisdiction over the Depositor or its properties, which
violation would reasonably be expected to have a material
and adverse effect on the condition (financial or otherwise)
or operations of the Depositor or its properties or on the
performance of its duties hereunder; and
(vii) any additional representations and warranties,
if any, that may be specified in the applicable Series
Supplement.
It is understood and agreed that the representations
and warranties of the Depositor set forth in this Section 2.4
shall survive delivery of the respective documents to the Trustee
and shall inure to the benefit of the Trustee on behalf of the
Certificateholders notwithstanding any restrictive or qualified
endorsement or assignment. Upon discovery by any of the Depositor
or the Trustee of a breach of any of the foregoing
representations and warranties which materially and adversely
affects the interests of the Certificateholders, the party
discovering such breach shall give prompt written notice thereof
to the other parties.
Section 2.5. Breach of Representation, Warranty or
Covenant. Within 90 days of the earlier of discovery by the
Depositor or receipt of notice by the Depositor of a breach of
any representation or warranty of the Depositor set forth in
Section 2.4 that materially and adversely affects the interests
of the Certificateholders of a given Series of Certificates, the
Depositor shall cure such breach in all material respects;
provided that, a breach by the Depositor of its representation
and warranty in Section 2.4(e) shall be cured by a repurchase or
substitution of such Term Asset in the manner prescribed by
Section 2.3 of this Agreement.
Section 2.6. Agreement to Execute, Authenticate and
Deliver Certificates. With respect to each Series of Certificates
and the related Trust, the Trustee hereby agrees and acknowledges
that it will, concurrently with the Grant to and receipt by it of
the related Term Assets, cause the Certificates of such series to
be executed, authenticated and delivered to, and upon Depositor
Order, in authorized denominations evidencing ownership of the
entire Trust for such Series, all in accordance with the terms
and subject to the conditions of Sections 5.2 and 5.13.
Section 2.7. Statement of Intent. It is the intention
of the parties hereto that, for purposes of federal income taxes,
state and local income and franchise taxes and any other taxes
imposed upon, measured by or based upon gross or net income, the
Trust shall be treated as a grantor trust, but failing that, as a
partnership. The terms of this Agreement shall be interpreted to
further this intention of the parties. The parties hereto agree
that, unless otherwise required by appropriate tax authorities,
the Trust shall file or cause to be filed annual or other
necessary returns, reports and other forms consistent with such
intended characterization. Each Certificateholder and each
beneficial owner of a Certificate by acceptance of its
Certificate (or its beneficial interest therein) agrees, unless
otherwise required by appropriate tax authorities, to file its
own tax returns and reports in a manner consistent with such
characterization.
ARTICLE III
Administration of each Trust
Section 3.1. Administration of each Trust. (a) The
Trustee shall administer the Term Assets for each given Trust for
the benefit of the Certificateholders of the related Series. In
engaging in such activities, the Trustee shall, subject to the
provisions of Article VI hereof, follow or cause to be followed
collection procedures in accordance with the terms of this
Agreement and the applicable Series Supplement, the respective
Term Assets and
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any applicable Credit Support Instruments. With respect to each
Trust, and subject only to the above-described standards and the
terms of this Agreement, the related Series Supplement and the
respective Term Assets and applicable Credit Support Instruments,
if any, the Trustee shall have full power and authority, acting
alone or through its agent, to do or cause to be done any and all
things in connection with such administration which it deems
necessary to comply with the terms of this Agreement and the
applicable Series Supplement.
(b) The parties acknowledge that the Trustee, as the
holder of the Term Assets, has the right to vote and give
consents and waivers in respect of the Term Assets and enforce
the other rights, if any, of a holder of the Term Assets, except
as otherwise limited by this Agreement. In the event that the
Trustee receives a request from the Term Assets Trustee, the Term
Asset Issuer or, if applicable, the Depositary with respect to
the Term Assets, for the Trustee's consent to any amendment,
modification or waiver of the Term Assets, the Indenture or any
other document thereunder, or relating thereto, or receives any
other solicitation for any action with respect to the Term
Assets, the Trustee shall within two Business Days mail a notice
of such proposed amendment, modification, waiver or solicitation
to each Certificateholder of record as of the date of such
request. The Trustee shall request instructions from the
Certificateholders as to what action to take in response to such
request and shall be protected in taking no action if no
direction is received. Except as otherwise provided herein, the
Trustee shall consent or vote, or refrain from consenting or
voting, in the same proportion (based on the Voting Rights of the
Certificates) as the Certificates of the Trust were actually
voted or not voted by the Holders thereof as of the date
determined by the Trustee prior to the date such vote or consent
is required; provided, however, that, notwithstanding anything to
the contrary in this Agreement, the Trustee shall at no time vote
in favor of or consent to any matter (i) that would alter the
timing or amount of any payment on the Term Assets (including,
without limitation, any demand to accelerate the Term Assets) or
(ii) that would result in the exchange or substitution of any
Term Asset pursuant to a plan for the refunding or refinancing of
such Term Asset, except in each case with the unanimous consent
of the Certificateholders and subject to the requirement that
such vote would not materially increase the likelihood that the
Trust will fail to qualify as a grantor trust for federal income
tax purposes, such determination to be based solely on an Opinion
of Counsel. The Trustee shall have no liability for any failure
to act or to refrain from acting resulting from the
Certificateholders' late return of, or failure to return,
directions requested by the Trustee from the Certificateholders.
(c) Except as is otherwise provided in the Series
Supplement, the Trustee shall act as the sole Authenticating
Agent, Paying Agent, and Certificate Registrar.
(d) The duties of the Trustee shall be performed in
accordance with applicable local, State and Federal law, and the
Trustee shall cooperate with Depositor the in making any and all
filings, reports, notices or applications with, and seek any
comments and authorizations from, the Commission and any State
securities authority on behalf of the Trust for each Series to
the extent it is provided with appropriate information, materials
and responses by the Depositor.
(e) The Trustee shall provide the Depositor as soon as
practicable copies of each notice, report or other communication
relating to the Term Assets and Term Assets Issuer received by it
in its capacity as holder of the Term Assets or in its capacity
as Trustee. In addition, the Trustee shall furnish to the
Depositor copies of all pleadings, complaints and other documents
relating to any Proceeding involving the Trust or the
Certificates.
Section 3.2. Collection of Certain Term Asset
Payments. With respect to any Series or Class of Certificates
until such time as the Term Assets in question are distributed to
Certificateholders pursuant to an In-Kind Distribution, the
Trustee shall make reasonable efforts to collect all payments
required to be made pursuant to the terms of the Term Assets or
any related Credit Support Instruments in a manner consistent
with the terms of this Agreement, such Term Assets and any
related Trust Asset Instruments, including making demand on Term
Asset Issuer or the Credit Support Provider for payment pursuant
to such Trust Asset Instrument. The Trustee shall have no
obligation to institute any Proceedings with respect to any
default under any Trust Asset Instrument except as provided in
the Series Supplement.
Section 3.3. Certificate Account. (a) For each Series
of Certificates, the Trustee shall establish and maintain one or
more Eligible Accounts (collectively, the "Certificate Account"),
held in trust for the benefit of
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the Certificateholders of such Series. The Trustee on behalf of
such Certificateholders shall possess all right, title and
interest in all funds on deposit from time to time in each
Certificate Account and in all proceeds thereof. With respect to
each Series of Certificates, the Certificate Account shall be
under the sole dominion and control of the Trustee for the
benefit of the related Certificateholders. With respect to each
Series of Certificates, except as otherwise specified in the
Series Supplement, the Trustee shall deposit or cause to be
deposited in the Certificate Account no later than the Business
Day on which amounts collected with respect to the Term Assets
are received, any Credit Support and all Liquidation Proceeds
related to such Series including:
(i) all payments on account of principal of such
Term Assets;
(ii) all payments on account of interest on such
Term Assets;
(iii) all payments on account of premium (if any)
on such Term Assets;
(iv) any payments in respect of any such Credit
Support;
(v) any interest or investment income earned on
funds deposited in the related Accounts; and
(vi) any Purchase Price of such Term Assets.
Unless otherwise specified in the applicable Series
Supplement, it is understood and agreed that payments in the
nature of prepayment or redemption penalties, late payment
charges or assumption fees which may be received by the Trustee
shall be deposited by the Trustee in the Certificate Account and
shall not be retained by the Trustee for its own account.
If, at any time, the Certificate Account for any
Series ceases to be an Eligible Account, the Trustee shall within
10 Business Days (or such longer period, not to exceed 30
calendar days, as to which the Rating Agency Condition is met)
establish a new Certificate Account meeting the conditions
specified above and transfer any cash and any investments on
deposit in the Certificate Account to such new Certificate
Account, and from the date such new Certificate Account is
established, it shall be the Certificate Account for such Series.
(b) If requested by the Rating Agency, if any, the
Trustee shall give notice to the Depositor and the Rating Agency,
if any, of the location of each Eligible Account constituting the
Certificate Account and prior to any change thereof.
(c) The Trustee shall determine the appropriate
application of Available Funds with respect to any Distribution
Date for which application is to be made on any such Distribution
Date in accordance with the terms of Section 4.1 and the related
Series Supplement.
Section 3.4. Investment of Funds in the Accounts. The
Depositor, on behalf of the Trust, may direct the Trustee to
direct any depository institution maintaining the Certificate
Account or the Reserve Account, if any, for the applicable Series
and any other segregated Eligible Account the contents of which
are held for the benefit of Certificateholders of such Series
(each, an "Account") to invest the funds therein in one or more
Permitted Investments bearing interest or sold at a discount,
which shall be held to maturity unless payable on demand and
which funds shall not be reinvested upon the maturity or demand
for payment of such Permitted Investment. If the Depositor does
not provide any investment directions to the Trustee, funds held
in any Account will be invested in the Permitted Investments
specified in clause (ii) of the definition thereof. Investments
of such funds shall be invested in Permitted Investments that
will mature so that such funds will be available for distribution
on the Distribution Date on which such amounts are to be applied
as distributions to Certificateholders. In the event amounts on
deposit in an Account are at any time invested in a Permitted
Investment payable on demand, the Trustee shall:
(x) consistent with any notice required to be
given thereunder, demand that payment thereon be made on
the last day such Permitted Investment may otherwise mature
hereunder in an amount
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equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on
such date; and
(y) demand same day payment of all amounts due
thereunder upon a determination by the Trustee that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in any
Account.
Section 3.5. Maintenance of Credit Support. If
specified in the applicable Series Supplement, on the applicable
Closing Date, the Trustee or, if so specified in the applicable
Series Supplement, the Depositor, shall, to the extent specified
in the applicable Series Supplement, establish and maintain, or
enter into, as applicable, a Reserve Account either as a part of
the related Trust or outside it, for the benefit of a Credit
Support Provider, as specified in the applicable Series
Supplement. To the extent specified in the applicable Series
Supplement, the Depositor will make or cause to be made any
initial deposit to the Certificate Account or any Reserve Account
for the related Series as of the Closing Date. Unless the Series
Supplement for a given Series provides otherwise, if a Reserve
Account exists for such Series, collections with respect to the
Term Assets for such Series not distributed to the
Certificateholders of such Series shall be deposited in the
Reserve Account.
Amounts on deposit in the Reserve Account and amounts
available pursuant to any Credit Support for such Series shall be
applied by the Trustee to make distributions of principal of and
premium (if any) and interest on the Certificates of such Series
as required pursuant to Section 4.1 and the applicable Series
Supplement to the extent that funds are not otherwise available
for such purpose. If specified in such Series Supplement,
immediately after each Distribution Date, amounts on deposit in
the Reserve Account for such Series in excess of a specified
amount shall be paid to the Person so specified in such Series
Supplement.
Section 3.6. In-Kind Distribution Events. (a) If:
(i) default is made in the payment of any installment
of interest on any Term Asset when the same becomes due and
payable, and such default continues unremedied beyond the
period specified in the indenture or other authorizing
document for such Term Asset (or, if no such period is
specified, three days);
(ii) default is made in the payment of the principal
of or any installment of the principal of any Term Asset
when the same becomes due and payable, and such default
continues unremedied for the period specified in the
indenture or other authorizing document for such Term Asset
(or, if no such period is specified, three days);
(iii) there is an acceleration of the maturity of the
Term Assets following a default (other than that described
in clauses (i) and (ii) above) in the indenture or other
authorizing document for such Term Asset and the Trustee
receives notice of such acceleration, notwithstanding any
subsequent recission or annulment of such acceleration;
then, as soon as practicable, the Trustee shall institute an
In-Kind Distribution of the Term Assets in question to the
Holders of Outstanding Certificates in the manner described by
the Series Supplement, subject to any conditions contained in a
Credit Support Instrument relating to such Term Assets as further
specified in the related Series Supplement. In connection
therewith, the Trustee shall use its best reasonable efforts in
accordance with such normal and customary procedures it shall
deem necessary or advisable, and shall have the power and
authority, acting alone, to do any and all things in connection
therewith and the administration of the Trust as it may deem
necessary or advisable.
(b) To the extent necessary to avoid an In-Kind
Distribution of Term Assets in unauthorized denominations, the
Trustee shall liquidate in a commercially reasonable manner such
Term Assets as are not distributable in authorized denominations.
After deduction of all reasonable costs of such liquidation, the
proceeds from such liquidation shall be distributed to
Certificateholders based on their respective rights to Term
Assets in unauthorized denominations.
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(c) In the event that the Trustee receives money or
other property in respect of Term Assets after an In-Kind
Distribution has occurred on such Term Assets, the Trustee shall
promptly give notice (as provided in Section 9.5 hereof) to the
Depository and shall distribute such moneys or other property to
the Holders of the Outstanding Certificates as allocable to the
Term Assets to which each such Holder received in the In-Kind
Distribution. Property received (other than cash) in such
circumstance shall be liquidated by the Trustee in a commercially
reasonable manner and the proceeds thereof, after deduction of
all reasonable costs of such liquidation, distributed in cash,
only to the extent necessary to avoid distribution of fractional
interests in such property on the same basis as the In-Kind
Distribution.
Section 3.7. Retained Interest. The Retained Interest,
if any, in any Term Asset shall initially be held by the Person so
specified in the related Series Supplement as and to the extent
specified in Schedule A thereof. With respect to each Term Asset,
the Retained Interest shall be deducted by the Trustee, at the
written direction of the Depositor from applicable collections in
respect of such Term Asset. Unless otherwise provided in the
applicable Series Supplement, collections in respect of Retained
Interest shall not be deposited in the Certificate Account for
the applicable Series and shall not constitute a part of the
Trust for such Series, but shall instead be distributed to the
holder of such Retained Interest, provided that the Series
Supplement for any Series with respect to which there is a
Retained Interest may provide that, notwithstanding the terms
contained herein, commingled amounts received in respect of
assets inclusive of Term Assets and Retained Interest may
initially be deposited in a separate and discrete Eligible
Account established by the Trustee at the direction of the
Depositor and such Series Supplement may provide for additional
terms relating thereto. Unless otherwise provided in the
applicable Series Supplement, after deduction of all applicable
fees as provided for in this Agreement, on each Distribution Date
the Trustee shall allocate on a pari passu basis any partial
recovery on a Term Asset between (a) the Retained Interest, if
any, and (b) distributions to Certificateholders of the
applicable Series.
Section 3.8. [Intentionally omitted]
Section 3.9. Access to Certain Documentation. The
Trustee shall provide to any Federal, State or local regulatory
authority that may assert authority over any Certificateholder
access to the documentation regarding the Term Assets required by
applicable laws and regulations. Such access shall be afforded
without charge, but only upon reasonable request and during
normal business hours at the offices of the Trustee designated by
each of them. In addition, access to the documentation regarding
the Term Assets related to a given Series (or Class within such
Series) will be provided to any Certificateholder of such Series
(or Class) upon reasonable request during normal business hours
at the offices of the Trustee designated by each of them at the
expense of the Certificateholder requesting such access.
Section 3.10. Depositor to Furnish Names and Addresses
of Holders to Trustee. The Depositor shall furnish or cause to be
furnished to the Trustee not more than five days before each
Distribution Date, and at such other times as the Trustee may
request in writing, a list, in such form as the Trustee may
reasonably require, to the extent such information is in the
possession or control of the Depositor or any of its paying
agents, of the Holders of Certificates as of the close of
business on the applicable record date of the Term Assets;
provided, however, that so long as the Trustee maintains the
Certificate Register, no such list shall be required to be
furnished.
Section 3.11. Preservation of Information, Communications
to Holders.
(a) The Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of the
Holders of Certificates contained in the most recent list
furnished to the Trustee as provided in Section 3.11 and the
names and addresses of Holders of Certificates received by the
Trustee in its capacity as Certificate registrar. The Trustee may
destroy any list furnished to it as provided in such Section 3.11
upon receipt of a new list so furnished.
(b) Holders shall have the right to communicate
pursuant to TIA Section 312(b) with other Holders with respect to
their rights under this Agreement or under the Certificates.
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(c) Irrespective of whether the TIA shall apply to
this Agreement, the Depositor, the Trustee, the Paying Agent and
the Certificate Registrar shall have the protections provided
pursuant to TIA Section 312(c).
Section 3.12. Reports by Trustee. If required by TIA
Section 313(a), within 60 days after December 31 of each year,
the Trustee shall mail to (i) each Holder as required by TIA
Section 313(c) and (ii) the Depositor, a brief report dated as of
such date that complies with TIA Section 313(a). The Trustee also
shall comply with TIA Section 313(b). A copy of any report
delivered pursuant to this Section 3.12 shall, at the time of its
mailing to Holders and the Depositor, be filed by the Trustee
with the Commission and each stock exchange, if any, on which the
Certificates are listed. The Depositor shall notify the Trustee
if and when the Certificates are listed on any stock exchange.
ARTICLE IV
Distributions and Reports to Certificateholders
Section 4.1. Distributions. On each Distribution Date
for a given Series of Certificates, the Trustee shall apply
Available Funds in the Certificate Account for such Series in the
manner and priority set forth in the Series Supplement for such
Series. Notwithstanding any other provisions in this Agreement,
the right of the Holder of any Certificate to receive any such
distributions in the manner and priority set forth in the Series
Supplement for such Series and to institute suit for the
enforcement of any such payment on or after the date such payment
is payable, shall not be impaired without the consent of such
Holder.
Section 4.2. Reports to Certificateholders. Unless
otherwise specified in the applicable Series Supplement, on the
next Business Day following each such Distribution Date the
Trustee, as specified in such Series Supplement, shall forward or
cause to be forwarded to the Depositor, each Certificateholder of
such Series and such other Persons as may be specified in such
Series Supplement, a statement setting forth:
(i) the amount of the distribution on such
Distribution Date to Certificateholders of each Class of
such Series allocable to principal, and interest, if
applicable, on the Certificates of each such Class; and the
amount of aggregate unpaid interest accrued or accreted, if
applicable, as of such Distribution Date;
(ii) any information reasonably requested by a
Certificateholder to enable such Certificateholders to
prepare their tax returns, provided that such information
is reasonably attainable in the requested form, and the
amount of compensation received by the Trustee for the
period;
(iii) the aggregate stated principal amount or, if
applicable, notional amount of the Term Assets related to
such Series, the current rating assigned by the Rating
Agency thereon and the current interest rate or rates
thereon at the close of business on such Distribution Date;
(iv) the aggregate Certificate Principal Balance (or
Notional Amount, if applicable) of each Class of such
Series at the close of business on such Distribution Date,
separately identifying any reduction in such aggregate
Certificate Principal Balance or aggregate Notional Amount
due to the allocation of any Realized Losses or otherwise;
and
(v) as to any Series (or any Class within such Series)
for which Credit Support has been obtained, the amount or
notional amount of coverage of each element of Credit
Support (and rating, if any, thereof) included therein as
of the close of business on such Distribution Date.
In the case of information furnished pursuant to
subclauses (i) and (iii) above, the amounts shall be expressed as
a Dollar amount (or the equivalent thereof in any other Specified
Currency) per minimum denomination of Certificates or for such
other specified portion thereof. Within a reasonable period of
time after the end of each calendar year, the Trustee shall
furnish to each person who at any time during each such calendar
year was a Certificateholder a statement containing the
information set forth in subclauses (i) and (iii) above,
aggregated for such calendar year or the applicable portion
thereof during which such person was a Certificateholder. Such
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obligation of the Trustee shall be deemed to have been satisfied
to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code
as are from time to time in effect.
Section 4.3. Compliance with Withholding Requirements.
If any withholding tax is imposed on the payment (or allocations
of income) to any Certificateholder, such tax shall reduce the
amount otherwise distributable to such Holder. The Trustee is
hereby authorized and directed to retain from amounts otherwise
distributable to any Holder sufficient funds for the payment of
any tax that is legally owed by the Trust (but such authorization
shall not prevent the Trustee from contesting any such tax in
appropriate proceedings and withholding payment of such tax, if
permitted by law, pending the outcome of such proceedings), or
that the Trustee may otherwise determine it is obligated to
withhold under applicable law or regulation. The amount of any
withholding tax imposed with respect to any Holder shall be
treated as cash distributed to such Holder at the time it is
withheld by the Trustee and remitted to the appropriate taxing
authority. If there is a possibility that withholding tax is
payable with respect to a distribution, the Trustee may in its
sole discretion withhold such amounts in accordance with this
Section 4.3. If any Holder wishes to apply for a refund of any
such withholding tax, the Trustee shall reasonably cooperate with
such Holder in making such claim so long as such Holder agrees to
reimburse the Trustee for any out-of-pocket expenses incurred.
The Trustee shall use reasonable efforts to give notice to each
Holder of any such withholding requirement at least 10 days prior
to the date of the payment from which amounts are required to be
withheld.
Section 4.4. No Charge for Reports to
Certificateholders. The Trustee shall deliver all notices or
reports required to be delivered to or by the Trustee or the
Depositor to the Certificateholders without charge to such
Certificateholders.
ARTICLE V
The Certificates
Section 5.1. The Certificates. The Certificates of any
Series (or Class within such Series) will be issued in
fully-registered form as Certificates and shall be substantially
in the form of the exhibits with respect thereto attached to the
applicable Series Supplement. The aggregate Certificate Principal
Balance or Notional Amount of Certificates that may be
authenticated and delivered under this Agreement is unlimited.
The Certificates may be issued in one or more Series,
each of which Series may be issued in one or more Classes, with such
further particular designations added or incorporated in such
title for the Certificates of any particular Series or Class
within such Series as the Board of Directors (or a Person
authorized by a Board Resolution) may determine. Each Certificate
shall bear upon its face the designation so selected for the
Series and Class to which it belongs. All Certificates of the
same Series and Class shall be identical in all respects except
for the denominations thereof. All Certificates of all Classes
within any one Series at any time Outstanding shall be identical
except for differences among the Certificates of the different
Classes within such Series specified in the applicable Series
Supplement. Except as otherwise provided in a Series Supplement,
all Certificates of a particular Series (and all Classes within
such Series) issued under this Agreement shall be in all respects
equally and ratably entitled to the benefits hereof without
preference, priority or distinction on account of the actual time
or times of authentication and delivery, all in accordance with
the terms and provisions of this Agreement.
Each Series (and all Classes within such Series) of
Certificates shall be created by a Series Supplement authorized
by the Board of Directors (or a Person authorized by a Board
Resolution) and establishing the terms and provisions of such
Series. The several Series may differ as between Series and any
Class may vary as between the other Classes within any given
Series in respect of any of the following matters:
(1) designation of such Series and Class;
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(2) the dates on which or periods during
which the Certificates of such Series and Class
may be issued;
(3) the number of Classes, the maximum
Certificate Principal Balance or Notional Amount of
Certificates of each Class that may be issued and any
priorities or subordination among Classes of a Series with
respect to distributions from the Trust;
(4) if applicable, for each Class of Certificates
with a specified interest rate, such rate or the method for
calculating such rate;
(5) the terms of the Letter of Credit, if any, or
of the Surety Bond, if any, or of any other Credit Support
for the benefit of the Certificateholders of such Series or
Class or group of Classes;
(6) the places, if any, in addition to or instead
of the Corporate Trust Office of the Trustee (in the case
of Certificates), where the principal of (and premium, if
any) and interest on Certificates of such Series and Class
shall be distributable;
(7) the Collection Periods, the Distribution Dates
and the Scheduled Final Distribution Dates for such Series
and Class;
(8) the types of Term Assets that will be
included in the Trust for such Series and the manner and
priorities of allocating distributions with respect to
collections of principal (and premium, if any) and interest
payments allocable to such Term Assets among Holders of
Certificates of different Classes (including whether the
Certificates of any such Class are to be entitled to
receive principal distributions with disproportionate,
nominal or no interest distributions, or interest
distributions with disproportionate, nominal or no
principal distributions, and, in each case, the applicable
terms thereof);
(9) the amount, if any, to be deposited on the
Closing Date in the Certificate Account for such Series;
(10) the manner in which the Reserve Account, if
any, is to be funded, the amount, if any, to be deposited
therein on the Closing Date and the Requisite Reserve
Amount, if any, for such Series or Class;
(11) whether the Certificates of such Series or
Class are to be issued as discount certificates and the
amount of discount with which such Certificates may be
issued;
(12) whether the Certificates of such Series or Class
are to be issued in whole or in part in the form of one or
more Global Securities and, in such case, the Depositary for
such Global Security or Securities and the terms and
conditions, if any, upon which interests in such Global
Security or Securities may be exchanged in whole or in part
for the individual Certificates represented thereby;
(13) if other than Dollars, the Currency in which
Certificates of such Series or Class shall be denominated
or in which distributions of the principal of (and premium,
if any) and interest on such Certificates may be made and
any other terms concerning such payment;
(14) if the principal of (and premium, if any) or
interest on Certificates of such Series or Class are to be
distributable, at the election of the Depositor or a Holder
thereof, in a Currency other than that in which such
Certificates are denominated or distributable without such
election, the periods within which and the terms and
conditions upon which such election may be made and the
time and the manner of determining the exchange rate
between the Currency in which such Certificates are
denominated or distributable without such election and the
Currency in which such Certificates are to be distributed
if such election is made;
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(15) any additional representations, warranties or
covenants provided for with respect to Certificates of such
Series;
(16) provisions with respect to the terms for
which the definitions set forth in Article I permit or
require further specification in the related Series
Supplement, including:
(a) "Available Funds";
(b) "Basic Documents";
(c) "Calculation Agent";
(d) "Closing Date";
(e) "Collection Period";
(f) "Corporate Trust Office";
(g) "Credit Support";
(h) "Credit Support Instrument";
(i) "Credit Support Provider";
(j) "Cut-off Date";
(k) "Depositary";
(l) "Depository Agreement";
(m) "Distribution Date";
(n) "Global Securities";
(o) "Grant";
(p) "Letter of Credit";
(q) "Limited Guarantor";
(r) "Limited Guaranty";
(s) "Notional Amount";
(t) "Permitted Investments";
(u) "Place of Distribution";
(v) "Purchase Price";
(w) "Rating Agency";
(x) "Rating Agency Condition";
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(y) "Record Date";
(z) "Required Percentage";
(aa) "Requisite Reserve Amount";
(ab) "Retained Interest";
(ac) "Scheduled Final Distribution Date";
(ad) "Specified Currency";
(ae) "Surety Bond";
(af) "Term Assets";
(ae) "Term Asset Issuer";
(ag) "Term Assets Schedule";
(ah) "Trust";
(ai) "Trustee";
(aj) "Trust Termination Event";
(ak) "Voting Rights";
(22) rights and remedies provided to any Credit
Support Provider with respect to all or a portion of the
Trust for such Series or Class;
(23) any restrictions on the sale and transfer of
the Certificates, including restrictions arising out of the
Securities Act, the Investment Company Act, the Employee
Retirement Income Security Act of 1974, as amended, or the
Code; and
(24) any other provisions expressing or referring
to the terms and conditions upon which the Certificates of
such Series or Class are to be issued under this Agreement
that do not prevent such Certificates from receiving the
Required Rating.
A different Trustee may be appointed by the Depositor for
each Series of Certificates prior to the issuance of such Series
provided that the Rating Agency Condition is met. If the initial
Trustee is to be other than The Bank of New York, then such
Series Supplement shall provide for the appointment of such
Trustee, as applicable, of such Series and shall add or change
any of the provisions of this Agreement as shall be necessary to
provide for or facilitate the administration of the trusts
hereunder and of the Term Assets; it being understood that
nothing contained herein or in such Series Supplement shall
constitute the Trustees for different Series as co-trustees for
the same Series and that each Trustee shall be a trustee of a
trust or trusts separate and apart from any trust or trusts
hereunder of any other Trustee. Upon final appointment of any new
Trustee, the Trustee shall provide a notice of such appointment
to the Rating Agency not later than 15 days following such
appointment.
Section 5.2. Execution, Authentication and Delivery.
(a) The Certificates shall be executed by the Trustee by its
authorized signatory. The signature may be manual or facsimile.
Certificates bearing the manual or facsimile signature of
individuals who were at any time the authorized signatory of the
Trustee shall be binding, notwithstanding that such individuals
or any of them have ceased to be an authorized signatory prior to
the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates.
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(b) Each Certificate shall be dated as of the later of
the date specified in the related Series Supplement and the date
of its authentication.
(c) No Certificate shall be entitled to any benefit
under this Agreement or be valid or obligatory for any purpose,
unless there appears on such Certificate a certificate of
authentication substantially in one of the forms provided for
herein executed by the Trustee by the manual signature of one of
its authorized signatories, and such certificate upon any
Certificate shall be conclusive evidence, and the only evidence,
that such Certificate has been duly authenticated and delivered
hereunder and is entitled to the benefits of this Agreement.
Section 5.3. Temporary Certificates. Pending the
preparation of Definitive Certificates of any Series (or Class
within such Series), the Trustee may execute, authenticate and
deliver upon receipt of a Depositor Order, temporary Certificates
which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially
of the tenor of the Definitive Certificates in lieu of which they
are issued, in registered form and with such appropriate
insertions, omissions, substitutions and other variations as may
be authorized by such Depositor Order. Any such temporary
Certificate may be in global form, representing all or a portion
of the Outstanding Certificates of such Series or Class. Every
such temporary Certificate shall be executed, authenticated and
delivered by the Trustee upon the same conditions and in
substantially the same manner, and with the same effect, as the
Definitive Certificate or Definitive Certificates in lieu of
which it is issued.
If temporary Certificates of any Series (or Class
within such Series) are issued, the Depositor will cause
Definitive Certificates of such Series or Class to be prepared
without unreasonable delay and (a) after the preparation of
Definitive Certificates of such Series or Class, the temporary
Certificates of such Series or Class shall be exchangeable for
Definitive Certificates of such Series or Class upon surrender of
the temporary Certificates of such Series or Class at the office
of the Trustee in a Place of Distribution for such Series or
Class, without charge to the Holder, except as provided in
Section 5.4 in connection with a transfer and (b) upon surrender
for cancellation of any one or more temporary Certificates of any
Series or Class within such Series the Trustee shall execute,
authenticate and deliver in exchange therefor Definitive
Certificates with a like Certificate Principal Balance or
Notional Amount, as applicable, of the same Series (or Class
within such Series) of authorized denominations and of like
tenor. Until so exchanged, temporary Certificates of any Series
(or Class within such Series) shall in all respects be entitled
to the same benefits under this Agreement as Definitive
Certificates of such Series or Class, except as otherwise
specified in the applicable Series Supplement with respect to the
payment of interest on Global Securities in temporary form.
Upon any exchange of a portion of a temporary Global
Security for a definitive Global Security or for the individual
Definitive Certificates represented thereby pursuant to this
Section 5.3 or Section 5.4, the temporary Global Security shall
be endorsed by the Trustee to reflect the reduction of the
aggregate Certificate Principal Balance or Notional Amount, as
applicable, evidenced thereby, whereupon the aggregate
Certificate Principal Balance or Notional Amount, as applicable,
of such temporary Global Security shall be reduced for all
purposes by the amount so exchanged and endorsed.
Section 5.4. Registration; Registration of Transfer
and Exchange. The Trustee shall cause to be kept a register for
each Series of Certificates (the registers maintained in such
office and in any other office or agency of the Trustee in a
Place of Distribution being herein sometimes collectively
referred to as the "Certificate Register") in which the Trustee,
as registrar and transfer agent (the "Certificate Registrar"),
shall provide for the registration of Certificates and the
registration of transfers and exchanges of Certificates. The
Trustee is hereby initially appointed Certificate Registrar for
the purpose of registering Certificates and transfers and
exchanges of Certificates as herein provided; provided, however,
that the Trustee may appoint one or more co-Certificate
Registrars. Upon any resignation of any Certificate Registrar,
the Depositor shall promptly appoint a successor or, in the
absence of such appointment, assume the duties of Certificate
Registrar.
If a Person other than the Trustee is appointed by the
Depositor as Certificate Registrar, the Depositor will give the
Trustee prompt written notice of the appointment of a Certificate
Registrar and of the location, and any change in the location, of
the Certificate Register, and the Trustee shall have the right to
rely upon
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a certificate executed on behalf of the Certificate Registrar by
an Executive Officer thereof as to the names and addresses of the
Holders of the Certificates and the principal amounts and numbers
of such Certificates.
Upon surrender for registration of transfer of any
Certificate of any Series (or Class within such Series) at the
office or agency of the Trustee, if the requirements of Section
8- 401(1) of the UCC are met to the Depositor's satisfaction and
upon satisfaction of any transfer restrictions set forth in the
related Series Supplement, the Trustee shall execute,
authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of any
authorized denominations, of a like Series, Class and aggregate
Certificate Principal Balance or Notional Amount, as applicable.
Notwithstanding any other provision of this Section,
unless and until it is exchanged in whole or in part for the
individual Certificates represented thereby, a Global Security
representing all or a portion of the Certificates of a Series (or
Class within such Series) may not be transferred except as a
whole by the Depositary for such Series or Class to a nominee of
such Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by such
Depositary or any such nominee to a successor Depositary for such
Series or Class or a nominee of such successor Depositary.
At the option of the Holder, Certificates of any
Series (or Class within such Series) (other than a Global
Security, except as set forth below) may be exchanged for other
Certificates of the same Series or Class of any authorized
denomination or denominations of like tenor and aggregate
Certificate Principal Balance or Notional Amount, as applicable,
upon surrender of the Certificates to be exchanged at the office
or agency of the Trustee maintained for such purpose.
Whenever any Certificates are so surrendered for
exchange, the Trustee shall execute, authenticate and deliver the
Certificates that the Holder making the exchange is entitled to
receive.
If at any time the Depositary for the Certificates of a
Series (or Class within such Series) notifies the Depositor that
it is unwilling or unable to continue as Depositary for the
Certificates of such Series or Class or if at any time the
Depositary for the Certificates of such Series or Class shall no
longer be eligible under Section 5.9(b), the Depositor shall
appoint a successor Depositary with respect to the Certificates
of such Series or Class. If a successor Depositary for the
Certificates of such Series or Class is not appointed by the
Depositor within 90 days after the Depositor receives such notice
or becomes aware of such ineligibility, the Depositor's election
pursuant to Section 5.1 shall no longer be effective with respect
to the Certificates of such Series or Class and the Depositor
will execute, and the Trustee, upon receipt of a Depositor Order
for the authentication and delivery of individual Certificates of
such Series or Class, will authenticate and deliver individual
Certificates of such Series or Class in an aggregate Certificate
Principal Balance or Notional Amount, as applicable, equal to the
aggregate Certificate Principal Balance or Notional Amount, as
applicable, of the Global Security or Securities representing
Certificates of such Series or Class in exchange for such Global
Security or Securities.
The Depositor may at any time and in its sole
discretion determine that individual Certificates of any Series
(or Class within such Series) issued in the form of one or more
Securities shall no longer be represented by such Global Security
or Securities. In such event, upon receipt of a Depositor Order
for the authentication and delivery of individual Certificates of
such Series or Class, the Trustee shall execute, authenticate and
deliver individual Certificates of such Series or Class in an
aggregate Certificate Principal Balance or Notional Amount, as
applicable, equal to the aggregate Certificate Principal Balance
or Notional Amount, as applicable, of the Global Security or
Securities representing Certificates of such Series or Class in
exchange for such Global Security or Securities.
If specified by the Depositor pursuant to Section 5.1
with respect to a Series (or Class within such Series) of
Certificates, the Depositary for such Series may surrender a
Global Security for such Series or Class in exchange in whole or
in part for individual Certificates of such Series or Class on
such terms as are acceptable to the Depositor and such
Depositary. Thereupon, upon receipt of a Depositor Order, the
Trustee shall execute, authenticate and deliver, without service
charge,
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(i) to each Person specified by such Depositary a new
individual Certificate or Certificates of the same Series
or Class, of any authorized denomination as requested by
such Person in an aggregate Certificate Principal Balance
or Notional Amount, as applicable, equal to and in exchange
for such Person's beneficial interest in the Global
Security; and
(ii) to such Depositary a new Global Security in a
denomination equal to the difference, if any, between the
aggregate Certificate Principal Balance or Notional Amount,
as applicable, of the surrendered Global Security and the
aggregate Certificate Principal Balance or Notional Amount,
as applicable, of individual Certificates delivered to
Holders thereof.
In any exchange provided for in any of the preceding
three paragraphs, upon receipt of a Depositor Order, the Trustee
will execute, authenticate and deliver individual Certificates in
registered form in authorized denominations.
Upon the exchange of a Global Security for individual
Certificates, such Global Security shall be canceled by the
Trustee. Individual Certificates issued in exchange for a Global
Security pursuant to this Section 5.4 shall be registered in such
names and in such authorized denominations as the Depositary for
such Global Security, pursuant to instructions from its
Participants, any indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Certificates
to the Persons in whose names such Certificates are so
registered.
All Certificates issued upon any registration of
transfer or exchange of Certificates shall constitute complete
and indefeasible evidence of ownership in the Trust related to
such Certificates and be entitled to the same benefits under this
Agreement as the Certificates surrendered upon such registration
of transfer or exchange.
Every Certificate presented or surrendered for
registration of transfer or exchange shall (if so required by the
Depositor, the Trustee or the Certificate Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer
in form satisfactory to the Depositor, the Trustee and the
Certificate Registrar, duly executed, by the Holder thereof or
his attorney duly authorized in writing, with such signature
guaranteed by a brokerage firm or financial institution that is a
member of a Securities Approved Medallion Program such as
Securities Transfer Agents Medallion Program (STAMP), Stock
Exchange Medallion Program (SEMP) or New York Stock Exchange Inc.
Medallion Signature Program (MSP).
No service charge shall be made to a Holder for any
registration of transfer or exchange of Certificates, but the
Depositor may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of
Certificates, other than exchanges pursuant to Section 5.3 not
involving any transfer.
Section 5.5. Mutilated, Destroyed, Lost and Stolen
Certificates. If (i) any mutilated Certificate is surrendered to
the Trustee at its Corporate Trust Office (in the case of
Certificates) or (ii) the Depositor and the Trustee receive
evidence to their satisfaction of the destruction, loss or theft
of any Certificate, and there is delivered to the Depositor and
the Trustee such security or indemnity as they may require to
hold each of them and any Paying Agent harmless, and neither the
Depositor nor the Trustee receives notice that such Certificate
has been acquired by a bona fide purchaser, then the Trustee
shall execute, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate
a new Certificate of the same Series and Class of like tenor,
form, terms and principal amount, bearing a number not
contemporaneously Outstanding.
Upon the issuance of any new Certificate under this
Section, the Depositor may require the payment of a sum
sufficient to cover any tax or other governmental charge that may
be imposed in respect thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Certificate of any Series or Class issued
pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Trust related to such
Series, whether or not the destroyed, lost or stolen Certificate
shall be at any time enforceable by anyone, and shall be entitled
to all the benefits of this
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Agreement equally and proportionately with any and all other
Certificates of that Series or Class duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Certificates.
Section 5.6. Distributions on Certificates; Rights
Preserved. (a) All Interest Collections on any Distribution Date
shall be distributed in the manner prescribed in the applicable
Series Supplement to the Person in whose name such Certificate
(or one or more Predecessor Certificates) is registered at the
close of business on the related Record Date notwithstanding the
cancellation of such Certificate upon any transfer or exchange
subsequent to such related Record Date. Distributions on
Certificates, other than a final distribution, shall be made at
the Corporate Trust Office (except as otherwise specified in the
Series Supplement pursuant to Section 5.1) or, at the option of
the Trustee, by check mailed to the address of the Person
entitled thereto as such address shall appear in the Certificate
Register or, if provided pursuant to Section 5.1 and in
accordance with arrangements satisfactory to the Trustee, at the
option of the Holder by wire transfer to an account designated by
the Holder.
(b) Subject to the foregoing provisions of this
Section 5.6, each Certificate delivered under this Agreement upon
transfer of or in exchange for or in lieu of any other
Certificate shall carry the rights to interest accrued and
undistributed, and to accrue, that were carried by such other
Certificate.
(c) All computations of interest due with respect to
any Certificate of any Series or Class within such Series shall
be made as specified in the Series Supplement applicable to that
particular Series or Class of Certificates.
(d) With respect to any computations or calculations
to be made under this Agreement, the applicable Series Supplement
and the Certificates, except as otherwise provided, (i) all
percentages resulting from any calculation of accrued interest
will be rounded, if necessary, to the nearest 1/100,000 of 1%
(.0000001), with five one-millionths of a percentage point
rounded upward, and (ii) all currency amounts will be rounded to
the nearest one-hundredth of a unit (with .005 of a unit being
rounded upward).
(e) Notwithstanding any other provisions in this Agreement,
the right of the Holder of any Certificate to receive any of the
payments described above in this Section 5.6, and to institute
suit for the enforcement of any such payment on or after the date
such payment is payable, shall not be impaired without the
consent of such Holder.
Section 5.7. Persons Deemed Owners. The Depositor and
the Trustee and any agent of the Depositor or the Trustee may
treat the Person in whose name any Certificate is registered as
the owner of such Certificate for the purpose of receiving
distributions of principal of (and premium, if any) and (subject
to Section 5.6) interest, if any, on such Certificate and for all
other purposes whatsoever, whether or not such Certificate be
overdue, and neither the Depositor, the Trustee, nor any agent of
the Depositor or the Trustee shall be affected by notice to the
contrary. All distributions made to any Holder, or upon his
order, shall be valid, and, to the extent of the sum or sums
paid, effectual to satisfy and discharge the liability for moneys
distributable upon such Certificate.
None of the Depositor, the Trustee, or any of their
agents will have any responsibility or liability for any aspect
of the records relating to or distributions made on account of
beneficial ownership interests in a Global Security or for
maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
In connection with any notice or other communication
to be provided to Holders pursuant to this Agreement by the
Trustee with respect to any consent or other action to be taken
by Holders, the Trustee shall establish a record date for such
consent or other action and in the case of Global Certificates,
give the Depository notice of such record date not less than 15
calendar days in advance of such record date to the extent
possible. Such record date shall be the later of thirty (30) days
prior to the first solicitation of such consent or other action
or the date of the most recent list of Holders furnished to the
Trustee pursuant to Section 3.11 hereof.
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Section 5.8. Cancellation. Unless otherwise specified
pursuant to Section 5.1 for Certificates of any Series, all
Certificates surrendered for payment, redemption, transfer or
exchange shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly
canceled by it. No Certificates shall be authenticated in lieu of
or in exchange for any Certificates canceled as provided in this
Section, except as expressly permitted by this Agreement.
Section 5.9. Global Securities. (a) If the Series
Supplement pursuant to Section 5.1 provides that a Series (or
Class within such Series) of Certificates shall be represented by
one or more Global Securities, then the Trustee shall execute,
authenticate and deliver one or more Global Securities that (i)
shall represent the aggregate initial Certificate Principal
Balance or Notional Amount, as applicable, of the Certificates of
such Series or Class to be represented by such one or more Global
Securities, (ii) shall be registered, in the name of the
Depositary for such Global Security or Securities or the nominee
of such Depositary, (iii) shall be delivered by the Trustee to
such Depositary or pursuant to such Depositary's instruction and
(iv) shall bear a legend substantially to the following effect:
"Unless and until it is exchanged in whole or in part for the
individual Certificates represented hereby, this Global Security
may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary or by
the Depositary or any such nominee to a successor Depositary or a
nominee of such successor Depositary."
No Holder of a Certificate of such Series or Class
will receive a Definitive Certificate representing such Holder's
interest in such Certificate or Certificates, except as provided
in Section 5.11. Unless and until definitive, fully registered
Certificates (the "Definitive Certificates") have been issued to
Holders of such Series or Class pursuant to Section 5.11:
(i) the provisions of this Section 5.9 shall be in
full force and effect;
(ii) the Certificate Registrar and the Trustee shall
be entitled to deal with the Depositary for all purposes of
this Agreement (including the distribution of principal of,
and premium, if any, and interest on the Certificates and
the giving of instructions or directions hereunder) as the
sole Holder of the Certificates of such Series or Class,
and shall have no obligation to the owners of beneficial
interests in such Series or Class (collectively, the
"Certificate Owners");
(iii) to the extent that the provisions of this Section
5.9 conflict with any other provisions of this Agreement, the
provisions of this Section 5.9 shall control;
(iv) the rights of Certificate Owners of such Series
or Class shall be exercised only through the Depositary and
shall be limited to those established by law and agreements
between such Certificate Owners and the Depositary or its
Participants; and
(v) whenever this Agreement requires or permits
actions to be taken based upon instructions or directions
of Holders of Certificates of such Series or Class
evidencing a specified percentage of the aggregate Voting
Rights of such Series or Class, the Depositary shall be
deemed to represent such percentage only to the extent that
it has received instructions to such effect from
Certificate Owners of such Series or Class or Participants
in such Depositary's system owning or representing,
respectively, such required percentage of the beneficial
interest in the Certificates of such Series or Class and
has delivered such instructions to the Trustee.
(b) Each Depositary designated pursuant to Section 5.1
for a Global Security in registered form must, at the time of its
designation and at all times while it serves as such Depositary,
be a clearing agency registered under the Exchange Act and any
other applicable statute or regulation.
Section 5.10. Notices to Depositary. Whenever a notice
or other communication to the Holders of a Series or Class within
such Series represented by one or more Global Securities is
required under this Agreement, unless and until Definitive
Certificates for such Series or Class shall have been issued to
such Certificate Owners pursuant to Section 5.11, the Trustee
shall give all such notices and communications specified
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herein to be given to Holders of the Certificates of such Series
to the Depositary, and shall have no obligation to the
Certificate Owners.
Section 5.11. Definitive Certificates. If in respect
of a Series (or Class within such Series) represented by one or
more Global Securities (i) the Depositor advises the Trustee in
writing that the Depositary is no longer willing or able to
properly discharge its responsibilities with respect to the
Certificates of such Series or Class and the Depositor is unable
to locate a qualified successor or (ii) the Depositor at its
option advises the Trustee in writing that it elects to terminate
the book-entry system for such Series or Class through the
Depositary, Certificate Owners representing beneficial interests
aggregating at least a majority (or such other Required
Percentage--Definitive Certificates that may be specified in a
Series Supplement) of the Voting Rights of the Certificates of
such Series or Class advise the Depositary in writing that the
continuation of a book-entry system for such Series or Class
through the Depositary is no longer in the best interests of the
Certificate Owners of such Series or Class, then the Depositary
shall notify all Certificate Owners or Participants in the
Depositary's system with respect to such Series or Class and the
Trustee of the occurrence of any such event and of the
availability of Definitive Certificates for such Series or Class
to Certificate Owners of such Series or Class requesting the
same. Upon surrender to the Trustee of the Global Securities of
such Series or Class by the Depositary, accompanied by
registration instructions, the Trustee shall execute,
authenticate the Definitive Certificates of such Series or Class
in accordance with the instructions of the Depositary. None of
the Depositor, the Certificate Registrar or the Trustee shall be
liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates of
such Series or Class, the Trustee shall recognize the holders of
the Definitive Certificates of such Series or Class as Holders.
Section 5.12. Currency of Distributions in Respect of
Certificates.
(a) Except as otherwise specified pursuant to Section
5.1 for Certificates of any Series (or Class within such Series),
distributions of the principal of (and premium, if any) and
interest on Certificates of such Series or Class will be made in
Dollars.
(b) For purposes of any provision of the Agreement where
the Holders of Outstanding Certificates may perform an act that
requires that a specified percentage of the aggregate Voting
Rights of the Certificates perform such act and for purposes of
determining the amount of a distribution payable to
Certificateholders, the principal of or notional amount of, as
applicable, the Outstanding Certificates denominated in a Foreign
Currency will be the amount in Dollars based upon exchange rates,
determined as specified pursuant to Section 5.1 for Certificates
of such Series, as of the date for determining whether the
Holders entitled to perform such act have performed it or as of
the date of such distribution, as the case may be.
(c) With respect to Certificates of any Series (or
Class within such Series), any decision or determination to be
made regarding exchange rates shall be made by an Exchange Rate
Agent appointed by the Depositor; provided that such Exchange
Rate Agent shall accept such appointment in writing and the terms
of such appointment shall be acceptable to the Trustee and shall,
in the opinion of the Depositor at the time of such appointment,
require such Exchange Rate Agent to make such determination by a
method consistent with the method provided in the applicable
Series Supplement for the making of such decision or
determination. All decisions and determinations of such Exchange
Rate Agent regarding exchange rates shall be in its sole
discretion and shall, in the absence of manifest error, be
conclusive for all purposes and irrevocably binding upon the
Depositor, the Trustee and all Holders of the Certificates of
such Series or Class.
(d) If distributions in respect of a Certificate are
required to be made in a Specified Currency other than Dollars
and such currency is unavailable due to the imposition of
exchange controls or other circumstance beyond the control of the
Trustee and the Depositor or is no longer used by the government
of the country issuing such Specified Currency or is no longer
commonly used for the settlement of transactions by public
institutions of or within the international banking community,
then all distributions in respect of such Certificate shall be
made in Dollars until such Specified Currency is again so used in
the manner specified in the related Series Supplement.
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Section 5.13. Conditions of Authentication and
Delivery of New Series. Certificates of a new Series may be
issued at any time and from time to time after the execution and
delivery of this Agreement. The Trustee shall execute,
authenticate and deliver such Certificates upon a Depositor Order
and upon delivery by the Depositor to the Trustee of the
following:
(1) Board Resolution. A Board Resolution (or action by
a Person authorized by Board Resolution) authorizing the
execution, authentication and delivery of the Certificates
and specifying the Series, the Classes within such Series
and their respective Scheduled Final Distribution Dates,
priorities as to distributions of principal, premium (if
any) and interest, aggregate initial Certificate Principal
Balances and Notional Amounts, if any, and Pass Through
Rates of, if any, each Class of such Series of Certificates
to be authenticated and delivered and the method of
calculation thereof.
(2) Series Supplement. A Series Supplement consistent
with the applicable provisions of this Agreement,
accompanied by a Board Resolution (or action by a Person
authorized by Board Resolution) authorizing such Series
Supplement (and, in the case of the first Series to be
authenticated and delivered hereunder, authorizing this
Agreement).
(3) Certificates of the Depositor.
(a) An Officer's Certificate of the Depositor,
dated as of the Closing Date, to the effect that the
Depositor is not in breach of this Agreement and that the
issuance of the Certificates applied for will not result in
any breach of any of the terms, conditions, or provisions
of, or constitute a default under, the Depositor's
Certificate of Incorporation or bylaws, or any indenture,
mortgage, deed of transfer or other agreement or instrument
to which the Depositor is a party or by which it or its
property is bound or any order of any court or
administrative agency entered in any Proceeding to which
the Depositor is a party or by which it or its property may
be bound or to which it or its property may be subject.
(b) An Officer's Certificate of the Depositor, dated
as of the Closing Date, to the effect that attached thereto
are true and correct copies of letters signed by the Rating
Agency (or other evidence satisfactory to the Trustee) and
confirming that the related Certificates have received the
Required Rating.
(4) Requirements of Series Supplement. Such other
funds, accounts, documents, certificates, agreements,
instruments or opinions as may be required by the terms of
the Series Supplement creating such Series.
If all the Certificates of a Series are not to be
originally issued at the same time, then the documents required
to be delivered pursuant to this Section 5.13 must be delivered
only once, prior to the authentication and delivery of the first
Certificate of such Series; provided, however, that any
subsequent Depositor Order to the Trustee to authenticate
Certificates of such Series upon original issuance shall
constitute a representation and warranty by the Depositor that,
as of the date of such request, the statements made in the
Officer's Certificates delivered pursuant to this Section 5.13
shall be true and correct as if made on such date.
Section 5.14. Appointment of Paying Agent. The Trustee
may appoint one or more paying agents (each, a "Paying Agent")
with respect to the Certificates of any Series. Any such Paying
Agent shall be authorized to make distributions to
Certificateholders of such Series from the Certificate Account
for such Series pursuant to the provisions of the applicable
Series Supplement and shall report the amounts of such
distributions to the Trustee. Any Paying Agent shall have the
revocable power to withdraw funds from such Certificate Account
for the purpose of making the distributions referred to above.
The Trustee may revoke such power and remove the Paying Agent if
the Trustee determines in its sole discretion that the Paying
Agent shall have failed to perform its obligations under this
Agreement in any material respect. The Paying Agent shall
initially be the Trustee and any co-paying agent chosen by the
Depositor and acceptable to the Trustee, including, if and so
long as any Series or Class within such Series is listed on the
Luxembourg Stock Exchange and such exchange so requires, a
co-paying agent in Luxembourg or another European city. Any
Paying Agent shall be permitted to resign as Paying Agent upon 30
days' notice to the Trustee. In the event that the Trustee shall
no longer be the Paying Agent, the Trustee
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shall appoint a successor or additional Paying Agent. The Trustee
shall cause each successor to act as Paying Agent to execute and
deliver to the Trustee an instrument in which such successor or
additional Paying Agent shall agree with the Trustee that (i) it
will hold all sums, if any, held by it for distribution to the
Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be
distributed to such Certificateholders and (ii) it will give the
Trustee notice of any default by any obligor on the applicable
Series of Certificates or on the Term Assets. The Paying Agent
shall return all unclaimed funds to the Trustee and upon removal
shall also return all funds in its possession to the Trustee. The
provisions of Sections 7.1, 7.2, 7.3, 7.5 and 7.9 shall apply to
the Trustee also in its role as Paying Agent, for so long as the
Trustee shall act as Paying Agent. Any reference in this
Agreement to the Paying Agent shall include any co-paying agent
unless the context requires otherwise. Notwithstanding anything
contained herein to the contrary, the appointment of a Paying
Agent pursuant to this Section 5.14 shall not release the Trustee
from the duties, obligations, responsibilities or liabilities
arising under this Agreement other than with respect to funds
paid to such Paying Agent.
Section 5.15. Authenticating Agent. (a) The Trustee
may appoint one or more Authenticating Agents (each, an
"Authenticating Agent") with respect to the Certificates of any
Series which shall be authorized to act on behalf of the Trustee
in authenticating such Certificates in connection with the
issuance, delivery and registration of transfer or exchange of
such Certificates. Whenever reference is made in this Agreement
to the authentication of Certificates by the Trustee or the
Trustee's certificate of authentication, such reference shall be
deemed to include authentication on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed
on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent must be acceptable to the Depositor.
Notwithstanding anything contained herein to the contrary, the
appointment of an Authenticating Agent pursuant to this Section
5.15 shall not release the Trustee from the duties, obligations,
responsibilities or liabilities arising under this Agreement.
(b) Any institution succeeding to the corporate agency
business of any Authenticating Agent shall continue to be an
Authenticating Agent without the execution or filing of any power
or any further act on the part of the Trustee or such
Authenticating Agent. An Authenticating Agent may at any time
resign by giving notice of resignation to the Trustee and to the
Depositor. The Trustee may at any time terminate the agency of an
Authenticating Agent by giving notice of termination to such
Authenticating Agent and to the Depositor. Upon receiving such a
notice of resignation or upon such a termination, or in case at
any time an Authenticating Agent shall cease to be acceptable to
the Trustee or the Depositor, the Trustee promptly may appoint a
successor Authenticating Agent. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be
appointed unless acceptable to the Depositor. The Trustee agrees
to pay to each Authenticating Agent from time to time reasonable
compensation for its services under this Section. The provisions
of Section 7.1, 7.2, 7.3, 7.5 and 7.9 shall be applicable to any
Authenticating Agent.
(c) Pursuant to an appointment made under this Section,
the Certificates may have endorsed thereon, in lieu of the Trustee's
certificate of authentication, an alternate certificate of
authentication in substantially the following form:
This is one of the Certificates described in the Trust
Agreement and the related Series Supplement.
______________________________
as Authenticating Agent
for the Trustee,
By____________________________
Authorized Signatory
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Section 5.16. Optional Exchange. (a) In connection
with any Series, the Depositor may exchange any Certificates or
all Certificates within a Class or a Series for a newly created
Class or Classes of Certificates evidencing interests in the
related Trust, having such terms as are provided in a Depositor
Request; provided that (i) in no case shall the aggregate
distributions payable on such newly created Class or Classes of
Certificates exceed the aggregate distributions payable on the
Certificates exchanged by the Depositor for the newly created
Class of Certificates; (ii) in no case shall the issuance of such
newly created Certificates adversely affect the rights or
interests of Holders of Certificates not so exchanged; (iii) the
Rating Agency Condition, if any, is satisfied; (iv) such exchange
would not, as evidenced by an opinion of Counsel, (a) be
inconsistent with the Trust's continued satisfaction of the
applicable requirements for exemption under Rule 3a-7 (or other
applicable rule or exemption) under the Investment Company Act
and (b) cause the Trust to fail to be characterized as a grantor
trust under federal income tax purposes.
(b) Upon completion of any such exchange, new
Certificates in a form mutually agreed upon by the Depositor and
the Trustee shall be executed, authenticated and delivered in
accordance with Sections 5.1, 5.2 and 5.3 mutatis mutandis.
ARTICLE VI
The Depositor
Section 6.1. Preparation and Filing of Exchange Act
Reports; Obligations of the Depositor. (a) The Depositor shall:
(i) on behalf of the Trust, prepare, sign and file
with the Commission, within the time period set forth
below, copies of the annual reports and of the information,
documents and other reports (or copies of such portions
of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe), if
any, which the Depositor on behalf of the Trust may be
required to file with the Commission pursuant to Section 13
or 15(d) of the Exchange Act (collectively, "Exchange Act
Reports") with respect to the Trust. The names of such
Reports and the dates on which they are required to be
filed with the Commission are as follows:
(A) Form 8-K, within the time requirement
prescribed by the Exchange Act if the filing of Form
8-K is necessary;
(B) Form 10-K, within the time requirement
prescribed by the Exchange Act; and
(C) such other reports as may be required
pursuant to Section 13 or 15(d) of the Exchange Act.
(ii) deliver to the Trustee within 15 days after the
Depositor is required to file the same with the Commission,
such additional information, documents and reports with
respect to compliance by the Depositor with the conditions
and covenants of this Agreement, if any, as may be required
to be filed with the Commission from time to time by such
rules and regulations; and
(iii) deliver to the Trustee, which shall then
transmit by mail to all Holders described in TIA Section
313(c), in the manner and to the extent provided therein,
such summaries of any information, documents and reports
required to be filed by the Depositor and received pursuant
to clauses (i) and (ii) of this Section 6.1(a), if any, as
may be required by rules and regulations prescribed from
time to time by the Commission.
(b) The Depositor shall deliver to the Trustee, not
less often than annually, an Officer's Certificate signed by an
Executive Officer who is the principal executive officer,
principal financial officer or principal accounting officer of
the Depositor, dated as of the date set forth in the Series
Supplement for such year, stating that:
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(i) a review of the activities of the Depositor during
such fiscal year and of performance under this Agreement
has been made under such Executive Officer's supervision;
and
(ii) to the best of such Executive Officer's
knowledge, based on such review, the Depositor has
fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in
the fulfillment of any such obligation, specifying each
such default known to such Executive Officer and the nature
and status thereof. A copy of such certificate may be
obtained by any Holder by a request in writing to the
Depositor addressed to the Corporate Trust Office of the
Trustee.
(c) Upon any application or request by the Depositor
to the Trustee to take any action under the provisions of this
Agreement, which action is subject to the satisfaction of a
condition precedent (including any covenants compliance with
which constitutes a condition precedent), the Depositor shall
furnish to the Trustee: (i) an Officer's Certificate stating that
all conditions precedent, if any, provided for in this Agreement
relating to the proposed action have been complied with, (ii) an
Opinion of Counsel stating that in the opinion of such counsel
all such conditions precedent, if any, have been complied with
and (iii) (if required by the TIA) an Independent Certificate
from a firm of certified public accountants meeting the
applicable requirements of the TIA, except that, in the case of
any such application or request as to which the furnishing of
such documents is specifically required by any provision of this
Agreement, no additional certificate or opinion need be
furnished. Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this
Agreement shall include:
(i) a statement that such signatory of such
certificate or opinion has read or has caused to be read
such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are
based;
(iii) a statement that, in the judgment of each such
signatory, such signatory has made such examination or
investigations as is necessary to enable such signatory to
express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each
such signatory, such condition or covenant has been
complied with.
Section 6.2. Merger or Consolidation of the Depositor
. (a) Subject to the following paragraph, the Depositor will keep
in full effect its existence, rights and franchises as a
corporation under the laws of the jurisdiction of its
incorporation and will obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, the Certificates
or any of the Term Assets and to perform its respective duties
under this Agreement.
(b) The Depositor may consolidate or merge with or
into any other Person, provided that:
(i) the Person (if other than the Depositor) formed by
or surviving such consolidation or merger shall expressly
assume, by an agreement supplemental hereto executed and
delivered to the Trustee, in form satisfactory to the
Trustee, the performance or observance of every agreement
and covenant of this Agreement on the part of the
Depositor, as applicable, to be performed or observed, all
as provided herein and in the applicable Series Supplement
or Supplements; and
(ii) the Depositor shall have delivered to the Trustee
an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation or merger and such
supplemental agreement comply with this Article VI and that
all conditions precedent herein provided for relating to
such transaction have been complied with.
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Section 6.3. Limitation on Liability of the Depositor.
(a) Unless otherwise expressly specified in this Agreement or a
Series Supplement, the Depositor shall not be under any
obligation to expend or risk its own funds or otherwise incur
financial liability in the performance of its duties hereunder or
under a Series Supplement or in the exercise of any of its rights
or powers if reasonable grounds exist for believing that the
repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
(b) Neither the Depositor, nor any of the directors,
officers, employees or agents of the Depositor shall be under any
liability to any Trust or the Certificateholders of any Series
for any action taken, or for refraining from the taking of any
action, in good faith pursuant to this Agreement, or for errors
in judgment; provided, however, that this provision shall not
protect the Depositor or any such person against any breach of
warranties, representations or covenants made herein, or against
any specific liability imposed pursuant hereto, or against any
liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of
duties or by reason of reckless disregard of obligations and
duties hereunder.
The Depositor shall not be under any obligation to
appear in, prosecute or defend any legal action unless such
action is related to its respective duties under this Agreement
and, in its opinion, does not involve it in any expense or
liability; provided, however, that the Depositor may in its
discretion undertake any such action which it may deem necessary
or desirable with respect to this Agreement and the rights and
duties of the parties hereto and the interests of the
Certificateholders hereunder. The legal expenses and costs of
such action and any liability resulting (except any loss,
liability or expense incurred by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and
duties hereunder) shall be allocated as specified in the
applicable Series Supplement.
Section 6.4. Depositor May Purchase Certificates.
The Depositor may at any time purchase Certificates in the open
market or otherwise. Certificates so purchased by the Depositor
may, at the discretion of the Depositor, be held or resold.
Certificates beneficially owned by the Depositor will be
disregarded for purposes of determining whether the required
percentage of the aggregate Voting Rights has given any request,
demand, authorization, direction, notice, consent or waiver
hereunder.
Section 6.5. Preferential Collection of Claims Against
Depositor. Irrespective of whether the TIA shall apply to those
Agreement, the Trustee shall comply with TIA Section 311(a),
excluding any creditor relationship listed in TIA Section 311(b).
A trustee who has resigned or been removed shall be subject to
TIA Section 311(a) to the extent required by TIA Section 311(a).
ARTICLE VII
Concerning the Trustee
Section 7.1. Duties of Trustee; Notice of Defaults.
(a) The Trustee prior to the occurrence of a default under a
Trust Asset Instrument and after the curing of all such defaults,
undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement and the related Series
Supplement. During the period in which such a default is
continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement, and shall use the same
degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of such
person's own affairs. Any permissive right of the Trustee
enumerated in this Agreement shall not be construed as a duty.
(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Trustee which are specifically
required to be furnished pursuant to any provision of this
Agreement, shall examine them to determine whether they conform
to the requirements of this Agreement. If any such instrument is
found not to conform to the requirements of this Agreement, the
Trustee shall take action as it deems appropriate to have the
instrument corrected, and if the instrument is not corrected to
the Trustee's satisfaction, the Trustee will provide notice
thereof to the Depositor and Certificateholders.
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(c) No provision of this Agreement shall be construed
to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act or its own misconduct;
provided, however, that:
(i) prior to the occurrence of a default under a Trust
Asset Instrument, and after the curing of all such
defaults, the duties and obligations of the Trustee shall
be determined solely by the express provisions of this
Agreement, the Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement
against the Trustee and, in the absence of bad faith on the
part of the Trustee, the Trustee may conclusively rely, as
to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or
opinions furnished to the Trustee or upon any directions or
information supplied by the Depositor that conform to the
requirements of this Agreement;
(ii) the Trustee shall not be personally liable for an
error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Trustee, unless it
shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(iii) the Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the direction
of Holders of the Required Percentage--Direction of Trustee
of the aggregate Voting Rights of a given Series (or Class
or group of Classes within such Series) relating to the time,
method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Agreement;
(iv) the Trustee shall not be required to expend or
risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers if there is
reasonable ground for believing that the repayment of such
funds or adequate indemnity against such risk or liability
is not reasonably assured to it, and none of the provisions
contained in this Agreement shall in any event require the
Trustee to perform;
(v) except for actions expressly authorized by this
Agreement, the Trustee shall take no actions reasonably
likely to impair the interests of the Trust in any Term
Asset now existing or hereafter acquired or to impair the
value of any Term Asset now existing or hereafter acquired;
(vi) except as expressly provided in this Agreement,
the Trustee shall not engage in any activity other than
those required or authorized by the terms of this
Agreement. In particular, after the Closing Date the
Trustee shall not purchase or otherwise acquire any
additional securities, modify or permit the modification of
any Trust Asset Instrument or otherwise vary the investment
of the Certificateholders or incur or modify any
obligations, (a) except as expressly required or permitted
by the terms of this Agreement or (b) unless the Trustee
obtains, at the expense of the Certificateholders, an
Opinion of Counsel to the effect that such acquisition,
incurrence or modification will not cause the Trust (unless
otherwise indicated in a related Series Supplement) to fail
to be classified as a grantor trust for federal income tax
purposes; and
(vii) in the event that the Paying Agent or the
Certificate Registrar shall fail to perform any obligation,
duty or agreement in the manner or on the day required to
be performed by the Paying Agent or Certificate Registrar,
as the case may be, under this Agreement, the Trustee shall
be obligated promptly upon its knowledge thereof to perform
such obligation, duty or agreement in the manner so
required.
(d) The Trustee shall have the legal power to exercise
all of the rights, powers and privileges of holders of the Term
Assets in which the Certificates evidence an interest. However,
neither the Trustee (except as specifically provided herein or in
the TIA) nor the Depositor shall be under any obligation
whatsoever to appear in, prosecute or defend any action, suit or
other proceeding in respect of Term Assets or Certificates.
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(e) Neither the Trustee nor the Depositor shall have
any obligation on or with respect to the Term Assets, except as
provided in this Article VIII with respect to the Trustee; and
their respective obligations with respect to Certificates shall
be solely as set forth in this Agreement.
(f) If there is an event of default (as defined in the
indenture or other document pursuant to which the Term Assets
were issued) with respect to any Term Asset and such default is
known to the Trustee, the Trustee shall promptly give notice to
the Depositor or, if the Certificates are Definitive
Certificates, directly to Holders thereof as provided in Section
9.5 hereof (and in the manner and to the extent provided in TIA
Section 313(c)) within 90 days after such event of default
occurs. Such notice shall set forth (i) the identity of the Term
Assets, (ii) the date and nature of such default, (iii) the face
amount of the obligation to which such default relates, (iv) the
identifying numbers of the Series and Class of Certificates, or
any combination, as the case may be, evidencing the obligations
(or portions thereof) described above in clause (iii), and (v)
any other information which the Trustee may deem appropriate.
Except in the case of a default in payment of principal or
interest (including payments pursuant to a redemption of any
Certificate), the Trustee may withhold the notice to Holders if
and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests
of the Holders.
(g) Holders of Certificates shall have no recourse
against the Depositor or the Trustee for payment defaults on the
Term Assets.
Section 7.2. Certain Matters Affecting the Trustee. (a)
Except as otherwise provided in Section 7.1:
(i) the Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any
resolution, Officer's Certificate, certificate of auditors
or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, appraisal, bond or
other paper or document reasonably believed by it to be
genuine and to have been signed or presented by the proper
party or parties;
(ii) the Trustee may consult with counsel and any
written advice or Opinion of Counsel shall be full and
complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good
faith and in accordance with such written advice or Opinion
of Counsel;
(iii) the Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this
Agreement or to institute, conduct or defend any litigation
hereunder or in relation hereto, at the request, order or
direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless such
Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or
thereby; provided, however, that nothing contained herein,
shall relieve the Trustee of the obligations upon the
occurrence of a default under a Trust Asset Instrument
(that has not been cured or waived) to exercise such of the
rights and powers vested in it by this Agreement, and to
use the same degree of care and skill in their exercise as
a prudent man would exercise or use under the circumstances
in the conduct of such person's own affairs;
(iv) the Trustee shall not be personally liable for
any action taken, suffered or omitted by it in good faith
and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this
Agreement;
(v) prior to the occurrence of any default under a
Trust Asset Instrument and after the curing of such
defaults, the Trustee shall not be bound to make any
investigation into the facts of matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, appraisal,
approval, bond or other paper or document believed by it to
be genuine, unless requested in writing to do so by Holders
of the Required Percentage--Direction of Trustee of the
aggregate Voting Rights of the affected Series (or Class or
Classes within any such Series), as specified by the
applicable Series Supplement; provided, however, that if
the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of the
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Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Agreement, the
Trustee may require reasonable indemnity against such
expense or liability as a condition to taking any such
action;
(vi) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys or a
custodian and shall not be liable for such persons' actions
if it has selected such persons with reasonable care; and
(vii) the Trustee shall not be personally liable for
any loss resulting from the investment of funds held in any
Certificate Account or Reserve Account at the direction of
the Depositor pursuant to Section 3.4.
(b) All rights of action under this Agreement or under
any of the Certificates, enforceable by the Trustee, may be
enforced by it without the possession of any of the Certificates
of any Series (or Class within such Series), or the production
thereof at the trial or other Proceeding relating thereto, and
any such suit, action or proceeding instituted by the Trustee
shall be brought in its name for the benefit of all the Holders
of such Certificates, subject to the provisions of this
Agreement.
Section 7.3. Trustee Not Liable for Recitals in
Certificates or Term Assets. The Trustee assumes no
responsibility for the correctness of the recitals contained
herein and in the Certificates or in any document issued in
connection with the sale of the Certificates (other than the
signature and authentication on the Certificates). Except as set
forth in Section 7.12, the Trustee makes no representations or
warranties as to the validity or sufficiency of this Agreement or
of the Certificates of any Series (other than the signature and
authentication on the Certificates) or of any Term Asset or
related document. The Trustee shall not be accountable for the
use or application by the Depositor of any of the Certificates or
of the proceeds of such Certificates.
Section 7.4. Trustee May Own Certificates. The Trustee
in its individual capacity or any other capacity may become the
owner or pledgee of Certificates with the same rights it would
have if it were not Trustee.
Section 7.5. Trustee's Fees and Expenses;
Indemnification; Undertaking for Costs. (a) The Trustee shall be
entitled to receive from the Depositor or an affiliate of the
Depositor as compensation for the Trustee's services hereunder,
trustee's fees pursuant to a separate agreement between the
Trustee and the Depositor, and shall be reimbursed for all
reasonable expenses, disbursements and advances incurred or made
by the Trustee (including the reasonable compensation,
disbursements and expenses of its counsel and other persons not
regularly in its employ). The Depositor shall indemnify and hold
harmless the Trustee and its successors, assigns, agents and
servants against any and all loss, liability or reasonable
expense (including attorney's fees) incurred by it in connection
with the administration of this trust and the performance of its
duties thereunder; the disclosure by the Depositor with respect
to the Term Assets except where such information is based on
erroneous information from the Trustee; any registration
statement of the Certificates of any Series under the Securities
Act; registration of the arrangement created by this Agreement
under the Investment Company Act; any failure by the Depositor to
file Exchange Reports on behalf of the Trust as may be required;
and any defect in the rights of the Trust to the Term Assets
arising under a breach of warranty by the Depositor made pursuant
to Section 2.4 hereof. The Trustee shall notify the Depositor
promptly of any claim for which it may seek indemnity. Failure by
the Trustee to so notify the Depositor shall not relieve the
Depositor of its obligations hereunder. The Depositor need not
reimburse any expense or indemnify against any loss, liability or
expense incurred by the Trustee through the Trustee's own willful
misconduct, negligence or bad faith. In the absence of actual
knowledge of a Responsible Officer that a tax filing signed by
the Trustee on behalf of the Trust pursuant to Section 7.14 is
incorrect, the execution of such a filing shall not be deemed to
be willful misconduct, negligent or in bad faith. The indemnities
contained in this Section 7.5(a) shall survive the resignation or
termination of the Trustee or the termination of this Agreement.
(b) Failure by the Depositor to pay, reimburse or
indemnify the Trustee shall not entitle the Trustee to any
payment, reimbursement or indemnification from the Trust, nor
shall such failure release the Trustee from the duties it is
required to perform under this Agreement. Any unpaid,
unreimbursed or unindemnified
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amounts shall not be borne by the Trust and shall not constitute
a claim against the Trust, but shall be borne by the Trustee in
its individual capacity.
(c) All parties to this Agreement agree, and each
Holder of any Certificate by such Holder's acceptance thereof
shall be deemed to have agreed, that any court may in its
discretion require, in any Proceeding for the enforcement of any
right or remedy under this Agreement, or in any Proceeding
against the Trustee for any action taken, suffered or omitted by
it as Trustee, the filing by any party litigant in such
Proceeding of an undertaking to pay the costs of such Proceeding
and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees, against any party
litigant in such Proceeding, having due regard to the merits and
good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 7.5(c) shall not apply to:
(i) any Proceeding instituted by the Trustee;
(ii) any Proceeding instituted by any Holder, or group
of Holders, in each case holding in the aggregate
Outstanding Certificates representing more than 10% of the
Voting Rights; or
(iii) any Proceeding instituted by any Holder for the
enforcement of the payment of principal or interest on or
after the respective due dates expressed in such
Certificate and in this Agreement (or, in the case of
redemption, on or after the redemption date).
Section 7.6. Eligibility Requirements for Trustee. (a)
The Trustee shall at all times satisfy the requirements of TIA
Section 310(a) and Section (a)(4)(i) of Rule 3a-7. The Trustee
hereunder shall at all times be a corporation which is not an
Affiliate of the Depositor (but may have normal banking
relationships with the Depositor or any obligor with respect to
the Term Assets with respect to such Series of Certificates and
their respective Affiliates) organized and doing business under
the laws of any State or the United States, authorized under such
laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000 and subject to
supervision or examination by Federal or State authority. If such
corporation or association publishes reports of conditions at
least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of such
corporation or association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of
conditions so published. Such corporation or association must be
rated in one of the four highest rating categories by the Rating
Agency.
(b) The Trustee shall comply with Section 310(b);
provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1), any Series Supplement under
which other securities are outstanding evidencing ownership
interest in obligations of the Term Asset Issuer if the
requirements for such exclusion set forth in TIA Section
310(b)(1) are met.
Section 7.7. Resignation or Removal of the Trustee.
(a) The Trustee may, with respect to any Series of Certificates,
at any time resign and be discharged from any trust hereby
created by giving written notice thereof to the Depositor, the
Rating Agency and to all Certificateholders of such Series. Upon
receiving such notice of resignation, the Depositor shall
promptly appoint a successor trustee for such Series by written
instrument, in duplicate, which instrument shall be delivered to
the resigning Trustee and to the successor trustee. A copy of
such instrument shall be delivered to such Certificateholders by
the Depositor. If no such successor trustee shall have been so
appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment
of a successor trustee for such Series.
(b) If at any time the Trustee shall cease to be
eligible in accordance with the provisions of Section 7.6 and
shall fail to resign after written request therefor by the
Depositor, or if at any time the Trustee shall become incapable
of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or
any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor may remove the
Trustee and
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appoint a successor trustee by written instrument, in
duplicate, which instrument shall be delivered to the Trustee so
removed and to the successor trustee. A copy of such instrument
shall be delivered to the Certificateholders by the Depositor.
(c) The Holders of Certificates of any Series
representing the Required Percentage--Removal of Trustee of the
aggregate Voting Rights may at any time remove the Trustee and
appoint a successor trustee by written instrument or instruments,
in triplicate, signed by such Holders or their attorneys-in-fact
and duly authorized, one complete set of which instruments shall
be delivered to the Depositor, one complete set to the Trustee so
removed and one complete set to the successor trustee so
appointed. A copy of such instrument shall be delivered to the
Certificateholders by the Depositor.
(d) Any resignation or removal of the Trustee and
appointment of a successor trustee pursuant to any of the
provisions of this Section shall not become effective until
acceptance of appointment by the successor trustee as provided in
Section 7.8.
Section 7.8. Successor Trustee. (a) Any successor
trustee appointed as provided in Section 7.7 shall execute,
acknowledge and deliver to the Depositor and to its predecessor
trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any
further act, deed or conveyance, shall become fully vested with
all the rights, powers, duties and obligations of its predecessor
hereunder (either with respect to a given Series of Certificates
or with respect to all Certificates issued under this Agreement),
with the like effect as if originally named as trustee herein.
The predecessor trustee shall deliver to the successor trustee
all documents and statements held by it hereunder, and the
Depositor and the predecessor trustee shall execute and deliver
such instruments and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in
the successor trustee all such rights, powers, duties and
obligations. No successor trustee shall accept appointment as
provided in this Section unless at the time of such acceptance
such successor trustee shall be eligible under the provisions of
Section 7.6.
(b) Upon acceptance of appointment by a successor
trustee as provided in this Section, the Depositor shall transmit
notice of the succession of such trustee hereunder to all Holders
of Certificates and to the Rating Agency in the manner provided
in Section 7.7.
Section 7.9. Merger or Consolidation of Trustee. Any
corporation or association into which the Trustee may be merged
or converted or with which it may be consolidated or any
corporation or association resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any
corporation or association succeeding to the trust business of
the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation or association shall be eligible under
the provisions of Section 7.6, without the execution or filing of
any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
Section 7.10. Appointment of Co-Trustee or Separate
Trustee. (a) Notwithstanding any other provisions hereof, at any
time, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust for a given Series
may at the time be located, the Depositor and the Trustee acting
jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the
Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any
part of such Trust, and to vest in such Person or Persons, in
such capacity, such title to such Trust, or any part thereof,
and, subject to the other provisions of this Section 7.10, such
powers, duties, obligations, rights and trusts as the Depositor
and the Trustee may consider necessary or desirable. If the
Depositor shall not have joined in such appointment within 15
days after the receipt by it of a request so to do, the Trustee
alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under
Section 7.6 hereunder and no notice to Holders of Certificates of
the appointment of co-trustee or co-trustees or separate trustee
or trustees shall be required under Section 7.8 hereof.
Notwithstanding anything contained herein to the contrary, the
appointment of a co-trustee pursuant to this Section
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7.10 shall not release the Trustee from the duties, obligations,
responsibilities or liabilities arising under this Agreement.
(b) In the case of any appointment of a co-trustee or
separate trustee pursuant to this Section 8.10, all rights,
powers, duties and obligations conferred or imposed upon the
Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be
performed by the Trustee, the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of
title to such Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed by such separate
trustee or co-trustee at the direction of the Trustee.
(c) Any notice, request or other writing given to the
Trustee shall be deemed to have been given to each of the then
separate trustees and co-trustees, as effectively as if given to
each of them. Every instrument appointing any separate trustee or
co-trustee shall refer to this Agreement and the conditions of
this Article VII. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the
estates or property specified in its instrument of appointment,
either jointly with the Trustee or separately, as may be provided
therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall
be filed with the Trustee.
(d) Any separate trustee or co-trustee may, at any
time, constitute the Trustee, its agent or attorney-in-fact, with
full power and authority, to the extent not prohibited by law, to
do any lawful act under or in respect of this Agreement on its
behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all
its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Trustee, to the extent permitted by
law, without the appointment of a new or successor trustee.
Section 7.11. Appointment of Office or Agency. As
specified in a Series Supplement, the Trustee shall appoint an
office or agency in the City of New York where the Certificates
may be surrendered for registration of transfer or exchange, and
presented for the final distribution with respect thereto, and
where notices and demands to or upon the Trustee in respect of
the Certificates of the related Series and this Agreement may be
served.
Section 7.12. Representations and Warranties of Trustee.
The Trustee represents and warrants that:
(i) the Trustee is duly organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation or association;
(ii) neither the execution nor the delivery by the
Trustee of this Agreement, nor the consummation by it of
the transactions contemplated hereby nor compliance by it
with any of the terms or provisions hereof will violate its
charter documents or by-laws.
(iii) the Trustee has full power, authority and right
to execute, deliver and perform its duties and obligations
as set forth herein and in each Series Supplement to which
it is a party and has taken all necessary action to
authorize the execution, delivery and performance by it of
this Agreement; and
(iv) this Agreement has been duly executed and
delivered by the Trustee and, assuming that this Agreement
has been duly executed and delivered by the Depositor and
is in compliance with all applicable law other than laws
applicable only to the Trustee as a banking institution,
constitutes the legal, valid and binding obligation of the
Trustee, enforceable in accordance with its terms, except
as enforcement may be limited by the applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or
at law).
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Section 7.13. Trustee to Act Only in Accordance With This
Agreement or Pursuant to Instructions of Certificateholders. The
Trustee shall only take such action or shall refrain from taking
such action under this Agreement as directed pursuant to a
specific provision of this Agreement or, if required hereunder,
by all the Certificateholders, and the Trustee shall not
otherwise act in respect of the Trust; provided, however, that
the Trustee shall not be required to take any such action if it
reasonably determines, or receives, at the expense of the
Certificateholders, an Opinion of Counsel (with copies thereof
delivered to the Certificateholders and the Depositor), that such
action (i) is inconsistent with the purpose of the Trust set
forth in Section 2.7 or contrary to the terms hereof.
Section 7.14. Accounting and Reports to
Certificateholders, Internal Revenue Service and Others. The
Trustee shall (a) maintain the books of the Trust on a calendar
year basis on the cash method of accounting, (b) after the close
of each calendar year, deliver to each Certificateholder, as may
be required by the Code and applicable Treasury Regulations or
otherwise, such information for such year as may be required to
enable each Certificateholder to prepare its federal income tax
returns, (c) cause independent public accountants to prepare such
tax returns relating to the Trust, execute and file such returns
and make such elections, as may from time to time be directed by
the Depositor, under any New York State, New York City or federal
statute or rule or regulation thereunder so as to maintain the
Trust's characterization as other than an association taxable as
a corporation for federal income tax purposes, (d) cause such tax
returns to be signed on behalf of the Trust in the manner
required by law and (e) collect or cause to be collected any
withholding tax as described in and in accordance with Subsection
4.3 with respect to income or distributions to
Certificateholders.
ARTICLE VIII
Termination
Section 8.1. Termination upon Purchase or Liquidation
of All Term Assets. (a) The respective obligations and
responsibilities under this Agreement of the Depositor and the
Trustee (other than the obligations of the Trustee to make
distributions to Holders of the Certificates of any given Series
as hereafter set forth) shall terminate (subject to surviving
rights of indemnity) upon the distribution to such Holders of all
amounts held in all the Accounts for such Series and required to
be paid to such Holders pursuant to this Agreement on the
Distribution Date coinciding with or following the earlier to
occur of (i) if and as provided in the Series Supplement for such
Series, the purchase by, and at the sole option of the Depositor,
as provided in the Series Supplement for such Series, of all
remaining Term Assets for such Series in the Trust for such
Series on any Distribution Date, provided that such option may be
exercised only if the aggregate principal amount of such Term
Assets at the time of any such purchase is less than 10% (or such
other percentage as may be specified in such Series Supplement)
of the aggregate principal amount of all Term Assets deposited in
such Trust as of the applicable Cut-off Date and (ii) the final
payment on or other liquidation (which may include redemption or
other purchase thereof by the applicable Term Asset Issuer) of
the last Term Asset remaining in the Trust for such Series or the
disposition of all property acquired upon foreclosure or
liquidation of any such Term Asset; provided, however, that in no
event shall the trust created hereby continue beyond the
expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the
United States to the Court of St. James, living on the date
hereof.
(b) The Depositor shall exercise its option to
purchase all the Term Assets remaining in the Trust pursuant to
clause (i) of Section 8.1(a) not later than 91 days prior to the
anticipated date of purchase of all such Term Assets, at a price
as may be specified in the applicable Series Supplement;
provided, however, that such price shall not be less than the
then outstanding aggregate principal amount of such Term Assets
as determined on the date of purchase. The proceeds of such
purchase will be deposited into the Certificate Account and
applied in the same manner and priority that collections on Term
Assets would be applied as provided in the applicable Series
Supplement.
(c) Written notice of any termination shall be
provided as set forth in Section 9.5.
(d) Upon presentation and surrender of the
Certificates by the Certificateholders on the Scheduled Final
Distribution Date, or the Distribution Date coinciding with or
next following the earlier to occur of the
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occurrences specified in clauses (i) and (ii) of Section 8.1(a),
with respect to the applicable Series of Certificates, the
Trustee shall distribute to each Holder presenting and
surrendering its Certificates the amount otherwise distributable
on such Distribution Date in accordance with Section 4.1 in
respect of the Certificates so presented and surrendered, if not
in connection with the purchase by the Depositor of all the Term
Assets. Any funds not distributed on such Distribution Date shall
be set aside and held in trust for the benefit of
Certificateholders not presenting and surrendering their
Certificates in the aforesaid manner, and shall be disposed of in
accordance with this Section 8.1 and Section 4.1 hereof.
Immediately following the deposit of funds in trust hereunder,
the Trust for such Series shall terminate.
ARTICLE IX
Miscellaneous Provisions
Section 9.1. Amendment. (a) This Agreement may be amended
from time to time by the Depositor and the Trustee without notice
to or the consent of any of the Certificateholders for any of the
following purposes: (i) to cure any ambiguity or to correct or
supplement any provision herein which may be defective or
inconsistent with any other provision herein; (ii) to add or
supplement any Credit Support for the benefit of any
Certificateholders; (iii) to add to the covenants, restrictions
or obligations of the Depositor or the Trustee for the benefit of
the Certificateholders; (iv) to add, change or eliminate any
other provisions with respect to matters or questions arising
under this Agreement; (v) to comply with any requirements imposed
by the Code; (vi) to evidence and provide for the acceptance of
appointment hereunder of a Trustee other than The Bank of New
York, as Trustee for a Series of Certificates, and to add to or
change any of the provisions of this Agreement as shall be
necessary to provide for or facilitate the administration of the
separate Trusts hereunder by more than one Trustee, pursuant to
the requirements of Section 5.1 hereof; (vii) to evidence and
provide for the acceptance of appointment hereunder by a
successor Trustee with respect to the Certificates of one or more
Series or to add or change any of the provisions of this
Agreement as shall be necessary to provide for or facilitate the
administration of the trusts hereunder; or (viii) to provide for
the issuance of new Certificates issued pursuant to Section 5.16
hereof; so long as (x) any such amendment described in (i)
through (viii), but not (vi), will not, as evidenced by an
Opinion of Counsel, cause the Trust (unless otherwise specified
in a related Series Supplement) to fail to be characterized as a
grantor trust for federal income tax purposes or result in a sale
or exchange of any Certificate for federal income tax purposes,
(y) the Trustee has received written confirmation from each
Rating Agency rating such Certificates that such amendment will
not cause such Rating Agency rating such Certificates to reduce
or withdraw the then current rating thereof and (z) the Trustee
has received an Officer's Certificate from the Depositor that
such amendment will not have a material adverse effect on any
Class of Certificateholders.
(b) Without limiting the generality of the foregoing,
with respect to any Series, this Agreement may also be modified
or amended from time to time by the Depositor and the Trustee
with the consent of the Holders of Certificates representing the
Required Percentage--Amendment of the aggregate Voting Rights of
each Class voting as a Class, of those Certificates to which such
modification or amendment relates for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the
rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or
alter the timing of, payments received on Term Assets which are
required to be distributed on any Certificate without the
unanimous consent of the Holders of such Certificates, (ii)
adversely affect in any material respect the interests of the
Holders of any Series (or Class within such Series) of
Certificates in a manner other than as described in (i), without
the consent of the Holders of Certificates of such Series or
Class evidencing not less than the Required Percentage--Amendment
of the aggregate Voting Rights of such Series or Class or (iii)
reduce the percentage of aggregate Voting Rights required by
(ii), as described in (ii), without the consent of the Holders of
all Certificates of such Series or Class then Outstanding; and
provided further that the Depositor shall furnish to the Trustee
an Opinion of Counsel (unless otherwise indicated in a related
Series Supplement) stating that, in the opinion of such counsel,
any such amendment would not cause the Trust to fail to be
characterized as a grantor trust for federal income tax purposes
or result in a sale or exchange of any Certificate for federal
income tax purposes. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents
pursuant to this Section 9.1, Certificates registered in the name
of the Depositor, or any Affiliate thereof, shall be entitled to
Voting Rights with respect to matters affecting such Certificates.
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Notwithstanding any other provision of this Agreement, this
Section 9.1(b) shall not be amended without the unanimous consent
of the Holders of all such Certificates.
(c) Promptly after the execution of any such amendment
or modification, the Trustee shall furnish a copy of such
amendment or modification to each Certificateholder of the
affected Series or Class and to the Rating Agency. It shall not
be necessary for the consent of Certificate-holders under this
Section to approve the particular form of any proposed amendment,
but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Section 9.2. Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such
counterparts shall constitute but one and the same instrument.
Section 9.3. Limitation on Rights of
Certificateholders. (a) The death or incapacity of any
Certificateholder shall not operate to terminate this Agreement
or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any
action or proceeding in any court for a partition or winding up
of the applicable Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of then.
(b) No Certificateholder of a given Series shall have
any right to vote (except as expressly provided for herein) or in
any manner otherwise control the operation and management of any
Trust, or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any
liability to any third person by reason of any action taken by
the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder of a given Series shall have any
right by virtue of any provision of this Agreement to institute
any suit, action or proceeding in equity or at law upon or under
or with respect to this Agreement, unless (i) such Holder
previously shall have given to the Trustee a written notice of
breach and of the continuance thereof and unless also the Holders
of Certificates of such Series evidencing not less than the
Required Percentage--Remedies of the aggregate Voting Rights of
such Series shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and
the Trustee, for 15 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused
to institute any such action, suit or proceeding. It is
understood and agreed that the Trustee shall not be obligated to
make any investigation of matters arising under this Agreement or
to institute, conduct or defend any litigation hereunder or in
relation hereto at the request, order or direction of any
Certificateholders unless such Certificateholders have offered to
the Trustee the reasonable indemnity referred to above. It is
further understood and agreed, and expressly covenanted by each
Certificateholder of each Series with every other
Certificateholder of such Series and the Trustee, that no one or
more Holders of Certificates of such Series shall have any right
in any manner whatever by virtue of any provision of this
Agreement to affect, disturb or prejudice the rights of the
Holders of any other of the Certificates of such Series, or to
obtain or seek to obtain priority over or preference to any other
such Holder, or to enforce any right under this Agreement, except
in the manner herein provided and for the equal, ratable and
common benefit of all Certificateholders of such Series. For the
protection and enforcement of the provisions of this Section,
each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in
equity.
Section 9.4. Governing Law. This Agreement shall be governed
by and construed in accordance with the law of the State of New
York without reference to such State's principles of conflicts of
law.
Section 9.5. Notices. All directions, demands and
notices hereunder shall be in writing and shall be delivered as
set forth in the applicable Series Supplement. Any notice
required to be provided to a Holder of a Certificate shall be
given by first class mail, postage prepaid, at the last address
of such Holder as shown in the
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<PAGE>
Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to
have been duly given when mailed, whether or not the
Certificateholder receives such notice.
Section 9.6. Severability of Provisions. If any one or
more of the covenants, agreements, provisions or terms of this
Agreement shall be for any reason whatsoever held invalid, then
to the extent permitted by law such covenants, agreements,
provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the
other provisions of this Agreement or of the Certificates or the
rights of the Holders thereof.
Section 9.7. Notice to Rating Agency. The Trustee
shall use its best efforts promptly to provide notice to each
Rating Agency, with a copy to the Depositor, with respect to each
of the following of which any of its Responsible Officers has
actual knowledge:
(i) any change or amendment to this Agreement;
(ii) the resignation or termination of the Trustee;
(iii) the repurchase or substitution of Term Assets,
if any, pursuant to Section 2.3;
(iv) the final payment to Holders of the Certificates
of any Class; and
(v) any change in the location of the Certificate
Account.
In addition, the Trustee shall promptly furnish to each Rating
Agency copies of each report to Certificateholders described in
Section 4.2 and the Trustee shall promptly furnish to each Rating
Agency copies of the following:
(i) each annual statement as to compliance described
in Section 3.8; and
(ii) each annual independent public accountants'
servicing report described in Section 3.9.
Any such notice pursuant to this Section shall be in writing and
shall be deemed to have been duly given if personally delivered
or mailed by first class mail, postage prepaid, or by express
delivery service to each Rating Agency at the address specified
in the applicable Series Supplement.
Section 9.8. Grant of Security Interest. It is the express
intent of the parties hereto that each conveyance of any Term
Assets by the Depositor to the Trustee be, and be construed as, a
sale of the Term Assets by the Depositor and not a pledge of any
Term Assets by the Depositor to secure a debt or other obligation
of the Depositor. However, in the event that, notwithstanding the
aforementioned intent of the parties, any Term Assets are held to
be property of the Depositor, then, (a) it is the express intent
of the parties that such conveyance be deemed a pledge of such
Term Assets by the Depositor to the Trustee to secure a debt or
other obligation of the Depositor and (b)(1) this Agreement shall
also be deemed to be a security agreement within the meaning of
Articles 8 and 9 of the UCC as in effect from time to time in the
State of New York, or such other State as may be specified in the
related Series Supplement; (2) the conveyance provided for in
Section 2.1 hereof shall be deemed to be a grant by the Depositor
to the Trustee of a security interest in all the Depositor's
right, title and interest in and to such Term Assets and all
amounts payable to the holders of such Term Assets in accordance
with the terms thereof and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash,
instruments, securities or other property, including all amounts
from time to time held or invested in the applicable Certificate
Account, whether in the form of cash, instruments, securities or
other property; (3) the obligations secured by such security
agreement shall be deemed to be all the Depositor's obligations
under this Agreement, including the obligation to provide to the
Certificateholders the benefits of this Agreement relating to
such Term Assets and the applicable Trust; and (4) notifications
to persons holding such property, and acknowledgments, receipts
or confirmations from persons holding such property, shall be
deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents
(as applicable) of the Trustee for the purpose of perfecting such
security interest under applicable law. Accordingly, the
Depositor hereby grants to the Trustee a security interest in the
44
<PAGE>
Term Assets and all other property described in clause (2) of the
preceding sentence, for the purpose of securing to the Trustee
the performance by the Depositor of the obligations described in
clause (3) of the preceding sentence. Notwithstanding the
foregoing, the parties hereto intend the Grant pursuant to
Section 2.1 to be a true, absolute and unconditional sale of the
Term Assets and assets constituting the applicable Trust by the
Depositor to the Trustee. The Depositor shall direct the Trustee
to the extent consistent with this Agreement, take such actions
as may be necessary to ensure that, if this Agreement were deemed
to create a security interest in the Term Assets, such security
interest would be deemed to be a perfected security interest of
first priority under applicable law and will be maintained as
such for so long as any of the Term Assets remain outstanding.
Without limiting the generality of the foregoing, the Trustee,
upon receipt of such direction, shall file, or shall cause to be
filed, all filings identified by the Depositor to be necessary to
maintain the effectiveness of any original filings identified by
the Depositor to be necessary under the UCC as in effect in any
jurisdiction to perfect the Trustee's security interest in or
lien on the Term Assets, including (x) continuation statements
and (y) such other statements as may be occasioned by (1) any
change of name of the Depositor or the Trustee, (2) any change of
location of the place of business or the chief executive office
of the Depositor or (3) any transfer of any interest of the
Depositor in any Term Asset.
Section 9.9. Nonpetition Covenant. Notwithstanding any
prior termination of this Agreement, each of the Trustee
(including any Co-Trustee), any agent (including the
Authenticating Agent, the Calculation Agent and the Paying Agent)
and the Depositor agrees that it shall not, until the date which
is one year and one day after the earlier of a Trust Termination
Event or the Scheduled Final Distribution Date, as defined in the
related Series Supplement, acquiesce, petition or otherwise
invoke or cause the Trust to invoke the process of the United
States of America, any State or other political subdivision
thereof or any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining
to government for the purpose of commencing or sustaining a case
by or against the Trust under a Federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar
official of the Trust or all or any part of the property or
assets of the Trust or ordering the winding up or liquidation of
the affairs of the Trust.
Section 9.10. No Recourse. Provided that there exists
no default on the Term Assets, neither the Trustee (including any
Co-Trustee), any agent (including the Authenticating Agent, the
Calculation Agent and the Paying Agent) nor the Depositor shall
have any recourse to the Term Assets, except as specifically
provided in the related Series Supplement.
Section 9.11. Article and Section References. All article
and section references used in this Agreement, unless otherwise
provided, are to articles and sections in this Agreement.
Section 9.12. Conflict with Trust Indenture Act.
(a) If any provision hereof limits, qualifies or
conflicts with another provision hereof that is required to be
included in this Agreement by any of the provisions of the TIA,
such required provision shall control.
(b) The provisions of the TIA Sections 310 through 317
that impose duties on any Person (including the provisions
automatically deemed included herein unless expressly excluded by
this Agreement) are a part of and govern this Agreement, whether
or not physically contained herein.
(c) Except as expressly provided in this Agreement,
all provisions specifically referencing the TIA shall be
inapplicable until such time as this Agreement is qualified under
the TIA.
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IN WITNESS WHEREOF, the Depositor and the Trustee have
caused their names to be signed hereto by their respective
officers thereunto duly authorized, in each case as of the day
and year first above written.
PRUDENTIAL SECURITIES STRUCTURED ASSETS,
INC., a Delaware corporation, as Depositor
By: /s/ Terrance O'Dwyer
--------------------------------
Name: Terrance O'Dwyer
Title: Senior Vice President
THE BANK OF NEW YORK,
a New York banking corporation, as Trustee
By: /s/ Fred Acebedo
--------------------------------
Name: Fred Acebedo
Title: Assistant Treasurer
46
[Execution Copy]
==================================================================
SERIES FDX 1997-1 SUPPLEMENT
between
PRUDENTIAL SECURITIES STRUCTURED ASSETS, INC.
as Depositor
and
THE BANK OF NEW YORK
as Trustee
Receipts on Corporate Securities Trust, Series FDX 1997-1
==================================================================
<PAGE>
TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT....................................... 1
SECTION 1. Certain Defined Terms................. 1
SECTION 2. Creation and Declaration of Trust; Grant
of Term Assets; Acceptance
by Trustee............................ 4
SECTION 3. Designation........................... 4
SECTION 4. Form and Date of the Certificates..... 4
SECTION 5. Certificate Principal Balance
and Notional Amount ................. 5
SECTION 6. Currency of the Certificates.......... 5
SECTION 7. Certain Provisions Regarding
Transfer and Exchange ................ 5
SECTION 8. Certain Provisions of Base Trust
Agreement Not Applicable ............. 6
SECTION 9. Distributions......................... 6
SECTION 10. Termination of Trust.................. 7
SECTION 11. Limitation of Powers and Duties....... 8
SECTION 12. Modification or Amendment............. 8
SECTION 13. [Intentionally Omitted]............... 8
SECTION 14. No Investment of Amounts Received
on Term Assets ....................... 8
SECTION 15. Rule 144A Information................. 8
SECTION 16. Notices............................... 8
SECTION 17. Access to Certain Documentation....... 8
SECTION 18. Ratification of Agreement............. 8
SECTION 19. Counterparts.......................... 9
SECTION 20. Governing Law......................... 9
SECTION 21. Trustee Election...................... 9
SECTION 22. Covenant of Depositor................. 9
EXHIBIT A -- Form of Amortizing Class Certificate
EXHIBIT B -- Form of Residual Class Certificate
SCHEDULE 1 -- Identification of Term Assets
i
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SERIES FDX 1997-1 SUPPLEMENT dated as of August 28, 1997 (this
"Series Supplement") between Prudential Securities Structured
Assets, Inc., a Delaware corporation, as depositor (the
"Depositor"), and The Bank of New York, a New York banking
corporation, as trustee (the "Trustee").
PRELIMINARY STATEMENT
Pursuant to the Base Trust Agreement dated as of August
28, 1997 (as amended and supplemented pursuant to this Series
Supplement, the "Agreement"), among the Depositor and the
Trustee, such parties may at any time and from time to time enter
into a series supplement supplemental to the Agreement for the
purpose of creating a trust. Section 5.13 of the Agreement
provides that the Depositor may at any time and from time to time
direct the Trustee to authenticate and deliver, on behalf of any
such trust, a new series of trust certificates. Each trust
certificate of such new series of trust certificates will
represent a fractional undivided beneficial interest in such
trust. Certain terms and conditions applicable to each such
series are to be set forth in the related series supplement to
the Agreement.
Pursuant to this Series Supplement, the Depositor and
the Trustee shall create and establish a new trust to be known as
Receipts on Corporate Securities Trust, Series FDX 1997-1 (the
"Trust"), and a new Series of trust certificates to be issued
thereby, which certificates shall be known as the Receipts of
Corporate Securities, Series FDX 1997-1 (the "Certificates"), and
the Depositor and the Trustee shall herein specify certain terms
and conditions in respect thereof.
The Certificates shall be issued in two Classes
consisting of (a) the Amortizing Class Certificates (the
"Amortizing Class Certificates") and (b) the Residual Class
Certificates (the "Residual Class Certificates"), subject to
Section 5.16 of the Agreement.
On behalf of and pursuant to the authorizing
resolutions of the Board of Directors of the Depositor, an
authorized officer of the Depositor has authorized the execution,
authentication and delivery of the Certificates, and has
authorized the Agreement and this Series Supplement in accordance
with the terms of Section 5.13 of the Agreement.
SECTION 1. Certain Defined Terms. (a) All terms used
in this Series Supplement that are defined in the Agreement,
either directly or by reference therein, have the meanings
assigned to such terms therein, except to the extent such terms
are defined or modified in this Series Supplement or the context
requires otherwise. The Agreement also contains rules as to usage
which shall be applicable hereto.
(b) Pursuant to Article I of the Agreement, the
meaning of certain defined terms used in the Agreement shall,
when applied to the trust certificates of a particular Series, be
as defined in Article I but with such additional provisions and
modifications as are specified in the related series supplement.
With respect to the Certificates, the following definitions shall
apply:
"Amortizing Class Certificates": a Class of securities
issued pursuant to this Agreement representing an undivided
interest in the distributions described in Section 9 payable to
such Class.
"Amortizing Class Final Distribution Date": July 1, 2017.
"Available Funds": As of any Distribution Date, the
aggregate amount received on or with respect to the Term Assets
on or with respect to such Distribution Date.
"Calculation Agent": The Depositor.
"Certificates": Receipts of Corporate Securities,
Series FDX 1997-1.
1
<PAGE>
"Certificateholder" or "Holder": With respect to any
Amortizing Class Certificate or Residual Class Certificate, the
Holder thereof.
"Certificate Principal Balance": For any Residual
Class Certificate, a pro rata portion of the principal amount of
the then outstanding Term Assets.
"Closing Date": August 28, 1997.
"Corporate Trust Office": The Bank of New York, One
Wall Street, New York, NY 10266, Attention: Corporate Trust or
such other corporate trust office as the Trustee shall designate
in writing to the Depositor and the Certificateholders.
"Distribution Date": Any Scheduled Distribution Date,
or an In-Kind Distribution Date, or the date on which a Maturity
Shortening Redemption occurs.
"Exchange Certificate": any Amortizing Class
Certificates and any Residual Class Certificates to be issued
pursuant to this Agreement in the Exchange Offer in exchange for
the Initial Certificates of the Amortizing Class and Initial
Certificates of the Residual Class, as the case may be, at the
request of the holder of such Initial Certificates.
"Exchange Offer": the offer registered by the
Depositor on behalf of the Trust pursuant to the Exchange Offer
Registration Statement in which the Trust offers to holders of
the Initial Certificates of the Amortizing Class and/or the
Residual Class the opportunity to exchange such outstanding
Initial Certificates of the Amortizing Class and Initial
Certificates of the Residual Class, as the case may be, for
Exchange Certificates of the Amortizing Class and Exchange
Certificates of the Residual Class, respectively, in an aggregate
principal amount equal to the aggregate principal amount of the
Initial Certificates tendered in such offer by such Holders.
"Exchange Offer Registration Statement": the
registration statement under the Securities Act relating to the
Exchange Offer, including the related prospectus, prepared and
signed by the Depositor on behalf of the Trust.
"Indenture": means the indenture dated as of July 1,
1996 between the Term Asset Issuer and the First National Bank of
Chicago, as trustee, as amended from time to time.
"Initial Certificate": any Amortizing Class Certificate
or any Residual Class Certificate to be originally issued,
authenticated and delivered pursuant to this Agreement on the
Closing Date.
"Interest Collections": With respect to any
Distribution Date, all payments received by the Trustee on or
from the Term Assets Issuer with respect to the Term Assets
immediately prior to such Distribution Date, in respect of (i)
interest on the Term Assets and (ii) penalties or other amounts
required to be paid because of late payments on the Term Assets.
"Maturity Shortening Redemption": A redemption of the
Certificates in whole, but not in part, as a result of the
Shortened Maturity Date occurring on or prior to July 1, 2017.
"Place of Distribution": New York, New York.
"Principal Collections": All principal payments
received by the Trustee on the Term Assets, including the
principal portion of redemption price in the event of Maturity
Shortening Redemption.
"Private Placement Legend": As defined in Section 4(c) hereof.
"Rating Agency": Initially none. At any time after the
Closing Date, the Depositor may designate one or more credit
rating agencies as a "Rating Agency" for purposes of this
Agreement by Depositor Order.
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<PAGE>
Thereafter, references to "the Rating Agency" in
the Agreement shall be deemed to be each such credit rating
agency.
"Record Date": With respect to any Distribution Date,
the 15th day immediately preceding such Distribution Date.
"Registration Rights Agreement": a registration rights
agreement between the Depositor and Prudential Securities
Incorporated dated August 25, 1997 relating to the Exchange
Offer.
"Residual Class Certificates": a Class of securities
issued pursuant to this Agreement representing an undivided
interest in the distributions described in Section 9 payable to
such Class.
"Scheduled Distribution Date": The first day of each
January and July, or, if any such day is not a Business Day and a
Term Assets Scheduled Payment Date, then the Business Day on or
immediately following the Term Assets Scheduled Payment Date,
commencing January 1, 1998, through and including July 1, 2017;
provided, however, that payment on each Scheduled Distribution
Date shall be subject to receipt of the corresponding payment of
interest or principal, as applicable, on the Term Assets.
"Scheduled Final Distribution Date": July 1, 2017.
"Shortened Maturity Date": A maturity date for the
Term Assets on or before July 1, 2017, designated by the Term
Assets Issuer, as a result of a Tax Event.
"Shortened Maturity Redemption": The payment by the
Term Assets Issuer pursuant to a Shortened Maturity Date.
"Specified Currency": United States Dollars.
"Tax Event": Means that the Term Asset Issuer shall
have received an opinion of nationally recognized independent tax
counsel to the effect that on or after the date of the issuance
of the Term Assets, as a result of (a) any amendment to,
clarification of, or change (including any announced prospective
change) in laws, or any regulations thereunder, of the United
States, (b) any judicial decision, official administrative
pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to
adopt such procedures or regulations (an "Administrative
Action"), or (c) any amendment to, clarification of or change in
the official position of the interpretation of such
Administrative Action or judicial decision that differs from the
theretofore generally accepted position, in each case, on or
after the date of the issuance of the Term Assets such change in
tax law creates a more than insubstantial risk that interest paid
by the Term Assets Issuer on the Term Assets is not, or will not
be, deductible, in whole or in part, by the Term Assets Issuer
for United States federal income tax purposes.
"Term Assets": The $52,000,000 aggregate principal
amount of 7.60% Notes due July 1, 2097 issued by the Term Assets
Issuer, deposited in the Trust by the Depositor and identified on
Schedule 1 hereto.
"Term Assets Issuer": Federal Express Corporation.
"Term Assets Scheduled Payment Date": The first day of
each January and July, commencing on January 1, 1998; provided,
however, that if any Term Assets Payment Date would otherwise
fall on a day that is not a Business Day (as defined in the
Indenture), such Term Assets Payment Date will be the following
Business Day as so defined.
"Term Assets Prospectus": The prospectus of the Term
Assets Issuer, dated July 7, 1997, as supplemented by a
supplement thereto dated July 7, 1997, with respect to the Term
Assets.
"Term Assets Trustee": The trustee under the Indenture.
3
<PAGE>
"Trust": Receipts on Corporate Securities Trust,
Series FDX 1997-1.
"Trustee": The Bank of New York, a New York banking
corporation.
"Trust Termination Event": (a) the distribution in
kind of the Term Assets to the Residual Class Certificateholders
on July 1, 2017, (b) the payment in full of the Certificates
following a Maturity Shortening Redemption, or (c) an In-Kind
Distribution.
"Voting Rights": Voting Rights will be allocated
between the Residual Class Certificateholders, on the one hand,
and the Amortizing Class Certificateholders, on the other, at any
date of determination in the same ratio as (i) the present value
of all originally scheduled future payments on the Term Assets
after July 1, 2017 bears to (ii) the present value of all
originally scheduled future payments on the Amortizing Class
Certificates, discounted semiannually in each case at a rate of
7.60% per annum to the date of determination. Such ratio will be
calculated by the Calculation Agent. Subject to the foregoing,
"Voting Rights" shall mean (a) with respect to the Amortizing
Class Certificates, the voting rights allotted to such Class,
allocated among all Holders of Amortizing Class Certificates in
proportion to the respective Notional Amount held by such Holders
on any date of determination, and (b) with respect to the
Residual Class Certificates, the voting rights allotted to such
Class, allocated among all Holders of Residual Class Certificates
in proportion to the respective Certificate Principal Balances
held by such Holders on any date of determination.
SECTION 2. Creation and Declaration of Trust; Grant of
Term Assets; Acceptance by Trustee. (a) The Depositor,
concurrently with the execution and delivery hereof and pursuant
to Section 2.1 of the Agreement, has delivered or caused to be
delivered to the Trustee the Term Assets in exchange for the
delivery to, or at the direction of the Depositor, of all of the
Certificates, representing the entire beneficial interest in all
of the assets of the Trust.
(b) The Trustee hereby (i) acknowledges such deposit,
pursuant to subsection (a) above, and receipt by it of the Term
Assets, (ii) accepts the trusts created hereunder in accordance
with the provisions hereof and of the Agreement but subject to
the Trustee's obligation, as and when the same may arise, to make
any payment or other distribution of the assets of the Trust as
may be required pursuant to this Series Supplement, the Agreement
and the Certificates, and (iii) agrees to perform the duties
herein or therein required and any failure to receive
reimbursement of expenses and disbursements under Section 7.5 of
the Agreement shall not release the Trustee from its duties
herein or therein.
SECTION 3. Designation. There is hereby created a
Series of trust certificates to be issued pursuant to the
Agreement and this Series Supplement to be known as the "Receipts
of Corporate Securities, Series FDX 1997-1." The Certificates
shall be issued in two Classes consisting of the Amortizing Class
Certificates and the Residual Class Certificates.
SECTION 4. Form and Date of the Certificates. (a) The
Initial Certificates of each Series that are executed,
authenticated and delivered by the Trustee to the Depositor upon
Depositor Order on the Closing Date shall be dated the Closing
Date. All other Certificates that are authenticated after the
Closing Date for any other purpose under the Agreement shall be
dated the date of their authentication. The Certificates shall
all be originally issued on the Closing Date and the certificate
of authentication of the Trustee thereon shall be substantially
in the form of Exhibit A or Exhibit B hereto, as specified below,
which are hereby incorporated in and expressly made a part of
this Agreement. The Exchange Certificates of each Series and the
certificate of authentication of the Trustee thereon shall be
substantially in the same form with those changes as are noted in
Exhibits A and B.
(b) Initial Certificates of each the Residual Class,
will be represented by one or more permanent Certificates in
definitive, fully registered form in minimum denominations of
$500,000 and integral multiples of $1,000 in excess thereof.
Initial Certificates of the Amortizing Class will be represented
by one or more permanent Certificates in definitive, fully
registered form in minimum denominations of $250,000 and integral
multiples of $1,000 in excess thereof. Initial Certificates of
the Amortizing Class retained by the Depositor and subsequently
4
<PAGE>
registered under the Securities Act may be transferred or
exchanged in minimum denominations of $1,000 and integral
multiples thereof.
(c) In the event Amortizing Class Initial Certificates
are tendered in an Exchange Offer, such Initial Certificates
shall be exchanged for one or more permanent Exchange
Certificates in same minimum denominations set forth in Section
4(b). In the event Residual Class Initial Certificates are
tendered in an Exchange Offer, such Initial Certificates shall be
exchanged for one or more Permanent Exchange Certificates in
definitive, fully registered form in the same denominations set
forth in Section 4(b).
Each Initial Certificate shall bear the following
legend (the "Private Placement Legend") on the face thereof:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER JURISDICTION.
SECTION 5. Certificate Principal Balance and Notional
Amount. The maximum Aggregate Certificate Principal Balance of
the Residual Class Certificates that may be executed,
authenticated and delivered under the Agreement and this Series
Supplement is $52,000,000. The maximum Notional Amount of
Amortizing Class Certificates that may be authenticated and
delivered under the Agreement and this Series Supplement is
$52,000,000. In each case such maximum amounts shall be
calculated without regard to Certificates authenticated and
delivered upon registration of transfer of, or in exchange for,
or in lieu of, other Certificates pursuant to Sections 5.3, 5.4,
5.5 or 5.16 of the Agreement. The Certificates are issuable in
minimum denominations specified in Section 4.
SECTION 6. Currency of the Certificates. All
distributions on the Certificates will be made in the Specified
Currency.
SECTION 7. Certain Provisions Regarding Transfer and
Exchange. (a) In the event that Depositor delivers to the Trustee
a copy of an Officers' Certificate certifying that an Exchange
Offer Registration Statement has been declared effective by the
Commission and that the Depositor has offered Exchange
Certificates to the Holders in accordance with the Exchange
Offer, the Trustee shall exchange, upon request of any Holder,
such Holder's Initial Certificates of any Class for Exchange
Certificates of such Series upon the terms set forth in the
Exchange Offer and in accordance with Section 4(c) hereof,
provided that the Initial Certificates so surrendered for
exchange are duly endorsed and accompanied by a letter of
transmittal or written instrument of transfer in form
satisfactory to the Trustee, in addition to any certifications
and representations required by the provisions of the
Registration Rights Agreement, and duly executed by the Holder
thereof or such Holder's attorney who shall be duly authorized in
writing to execute such document on the behalf of such Holder.
The Trustee shall not be required (i) to issue,
register the transfer of or exchange any Certificate during the
period of 15 days ending on (and including) any Distribution
Date.
(b) Upon receipt of a Depositor Request to the effect
that specified Initial Certificates (the "Registered Certificates")
have been registered under the Securities Act, if Initial
Certificates of such Class are issued upon the transfer, exchange
or replacement of the Registered Certificates, or if a request is
made to remove such Private Placement Legend on the Registered
Certificates, the Trustee shall execute, authenticate and deliver
Initial Certificates that do not bear the Private Placement
Legend.
(c) In connection with each transfer of an Initial
Certificate, the transferee will be required to complete the
certification annexed to such Initial Certificate unless the
Depositor has furnished a Depositor Order to the effect that such
transfer form is no longer required to assure compliance with
Rule 3a-7.
5
<PAGE>
(d) In connection with each transfer of a Residual
Class Certificate, the transferee will be required to deliver to
the Trustee a certification upon purchase of such Certificate to
the effect that the beneficial owner thereof (whether such
registered holder or the ultimate beneficiary for whom it holds
such Certificate) is either (i) a United States person, or (ii) a
non-United States person who is exempt from withholding under
U.S. federal income tax laws and has completed, accurately and in
a manner reasonably satisfactory to the Trustee or its agent, an
IRS Form W-8 and delivered such Form to the Trustee or its agent.
Such transferee will be deemed to have represented and
agreed with the Trustee that so long as it is the registered
holder of such Certificate, the beneficial owner thereof will be
a person described in clauses (i) or (ii) above and, in the event
of any change in the identity of the beneficial owner for whom
such registered holder is acting or any lapse of a Form W-8
previously delivered to the Trustee, it will promptly deliver a
new certification or a current Form W-8, as applicable.
If a Responsible Officer has actual knowledge or
reason to know that the certification or deemed representation
made by such registered holder is incorrect or if such registered
holder does not provide the current Form W-8 as described above
within ten days after the prior such Form has lapsed, then, the
Trustee will furnish a notice to such registered holder stating
that (i) such registered holder must, within 30 calendar days
from the date of such notice, effect the registration of transfer
of its Residual Class Certificate to a person that certifies that
the beneficial owner of the Certificate is a U.S. person or
exempt from U.S. withholding tax as described above and (ii) if
such transfer does not occur by the thirtieth day, the Holder
will be deemed irrevocably to have appointed Prudential
Securities Incorporated or Prudential-Bache Securities (U.K.)
Inc. (either a "Broker") as its broker to sell such Holder's
Certificate on its behalf to a qualified purchaser at a fair
market price (net of customary brokerage commissions) within the
next succeeding five Business Days. For purposes of effectuating
such sale pursuant to clause (ii) of the preceding sentence, the
Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Holder to, and shall, (a) instruct the
broker to effect the foregoing sale, (b) receive from the broker
the net proceeds from such sale for the account of the Holder and
(c) deliver to or upon the order of the broker a new Certificate
issued in exchange for the Certificate of the Holder sold by the
broker (whereupon the Holder's Certificate will be deemed to have
been surrendered and canceled and cease to be outstanding for any
purpose hereunder or entitled to any rights or benefits
hereunder). The Trustee shall pay to the Holder, within five
Business Days of receipt thereof from the broker, the net
proceeds of such sale, such payment to be made in the same manner
as such Holder received its most recent payment on the
Certificate. Each Holder, by its acceptance of a Certificate,
hereby consents to and agrees with the provisions of this Section
7.
SECTION 8. Certain Provisions of Base Trust Agreement
Not Applicable. The provisions of Sections 2.2(b), 2.3 and 8.1 of
the Base Trust Agreement dated as of August 28, 1997 shall be
inapplicable with respect to the Certificates.
SECTION 9. Distributions. (a) On each Scheduled
Distribution Date, the Trustee shall distribute to the Holders of
the Amortizing Class Certificates all Interest Collections
constituting Available Funds.
(b) On July 1, 2017, the Trustee shall distribute the
Term Assets in kind to the Residual Class Certificateholders.
Such distribution shall not infringe on the rights of the
Amortizing Class Certificates to all Interest Collections on July
1, 2017.
(c) In the event of an Shortened Maturity Redemption, the
Trustee shall distribute the amount received from the Term Assets
Issuer on or with respect to any Shortened Maturity Date to the
Holders of the Residual Class Certificates and the Amortizing
Class Certificates, respectively, in same ratio as (i) the
present value of all scheduled future payments on the Term Assets
after July 1, 2017 bears to (ii) the present value of all
scheduled future payments on the Amortizing Class Certificates,
discounted semiannually in each case at a rate of 7.60% per annum
to the date of the Shortened Maturity Redemption. Such amounts
shall be calculated by the Calculation Agent.
(d) In the event of an In-Kind Distribution, pursuant to
Section 3.6 of the Agreement, the Trustee shall make such In-Kind
Distribution to the Holders of the Residual Class Certificates
and the Holders of the
6
<PAGE>
Amortizing Class Certificates, respectively, in the same ratio as
(i) the present value of all scheduled future payments on the
Term Assets after July 1, 2017 bears to (ii) the present value of
all scheduled future payments on the Amortizing Class
Certificates, discounted semiannually in each case at a rate of
7.60% per annum to the date of such payment default or
acceleration of the Term Assets occurred. Such amounts shall be
calculated by the Calculation Agent.
(e) Distributions of any Purchase Price pursuant to
Section 2.3 or 2.5 of the Agreement shall be distributed in the
same ratio set forth in subsection (c) above discounted to the
date on which the Purchase Price is distributed. Such
distribution shall be made fifteen days after receipt of the
Purchase Price.
(f) Distributions to the Certificateholders on each
Distribution Date will be made to the Certificateholders of
record on the related Record Date of the Amortizing Class
Certificates and Residual Class Certificates, as applicable.
(g) All distributions to Certificateholders of any
Class shall be allocated pro rata among the Certificates of such
Class Balances or Notional Amounts, as the case may be, as of the
Record Date with respect to such Distribution Date.
(h) Notwithstanding any provision of the Agreement to
the contrary, to the extent funds are available, the Trustee will
initiate payment in immediately available funds by 10:00 A.M.
(New York City time) on each Distribution Date of all amounts
payable to each Certificateholder with respect to any Certificate
held by such Certificateholder or its nominee (without the
necessity for any presentation or surrender thereof or any
notation of such payment thereon) in the manner and at the
address as each Certificateholder may from time to time direct
the Trustee in writing fifteen days prior to such Distribution
Date requesting that such payment will be so made and designating
the bank account to which such payments shall be so made. The
Trustee shall be entitled to rely on the last instruction
delivered by the Certificateholder pursuant to this Section 10(h)
unless a new instruction is delivered 15 days prior to a
Distribution Date.
(i) The rights of the Certificateholders to receive
distributions in respect of the Certificates, and all interests
of the Certificateholders in such distributions, shall be as set
forth in this Series Supplement. The Trustee shall in no way be
responsible or liable to the Certificateholders nor shall any
Certificateholder in any way be responsible or liable to any
other Certificateholder in respect of amounts previously
distributed on the Certificates based on their respective
Certificate Principal Balances.
(j) The Trustee shall furnish notice to
Certificateholders as soon as practicable after a Responsible
Officer learns of a situation giving rise to a distribution under
subsections (c), (d) or (e) hereof.
SECTION 10. Termination of Trust. (a) The Trust shall
terminate upon the occurrence of any Trust Termination Event and
the distribution to Certificateholders of all amounts or property
required to be distributed to them and the disposition of all
Term Assets held by the Trustee.
(b) Promptly after the Trustee has received a notice
from the Term Assets Trustee or the Term Assets Issuer of a
Maturity Shortening Redemption, a payment default or an
acceleration under the Indenture, the Trustee shall provide
notice to the Certificateholders of the expected occurrence of a
Trust Termination Event and the termination of the Trust.
(c) The obligations of the Trust will thereupon
terminate, except for any reports and other information required
to be provided to Certificateholders hereunder and under the
Agreement and except as otherwise specified.
SECTION 11. Limitation of Powers and Duties. (a) The
Trustee shall administer the Trust and the Term Assets solely as
specified herein and in the Agreement.
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(b) The Trust is constituted solely for the purpose of
acquiring and holding the Term Assets. The Trustee is not
authorized to acquire any other investments or engage in any
activities not authorized herein and, in particular,
notwithstanding anything to the contrary in the Agreement, the
Trustee is not authorized (i) to sell, assign, transfer,
exchange, pledge, set-off or otherwise dispose of any of the Term
Assets, once acquired, or interests therein, including to
Certificateholders except as expressly provided as Section 3.6 of
the Agreement or (ii) to do anything that would materially
increase the likelihood that the Trust will fail to qualify as a
grantor trust for United States federal income tax purposes.
SECTION 12. Modification or Amendment. In addition to,
and notwithstanding anything to the contrary in, the Agreement or
this Series Supplement, the Trustee, upon receipt of a Depositor
Order, shall amend this Series Supplement providing for the
issuance of any Class of Initial Certificates or Exchange
Certificates in the form of a Global Security issued to a
Depositary specified by the Depositor. Such amendment shall not
require the consent of Certificateholders or compliance with any
other conditions contained in Section 9.1 of the Agreement.
SECTION 13. [Intentionally Omitted]
SECTION 14. No Investment of Amounts Received on Term
Assets. All amounts received on or with respect to the Term
Assets shall be held uninvested by the Trustee without liability
for interest thereon.
SECTION 15. Rule 144A Information. If the Depositor
with respect to the Trust is not subject to Section 13 or 15(d)
of the Exchange Act with respect to such Certificate, then
Trustee will furnish, upon request, to holders and prospective
purchasers of Initial Certificates information, which upon
request by the Trustee shall be assembled and delivered to the
Trustee by the Depositor, satisfying the requirement of
subsection (d)(4)(i) of Rule 144A.
SECTION 16. Notices. (a) All directions, demands and
notices hereunder and under the Agreement shall be in writing and
shall be deemed to have been duly given when received if
personally delivered or mailed by first class mail, postage
prepaid or by express delivery service or by certified mail,
return receipt requested or delivered in any other manner
specified herein, (i) in the case of the Depositor, to Prudential
Securities Structured Assets, Inc., One Seaport Plaza, 29th
Floor, New York, New York 10292-2015, Attention: Linda Muller, or
such other address as may hereafter be furnished to the Trustee
in writing by the Depositor, and (ii) in the case of the Trustee,
to The Bank of New York, One Wall Street, New York, New York
10266, Attention: Corporate Trust, or such other address as may
hereafter be furnished to the Depositor in writing by the
Trustee.
(b) For purposes of delivering notices to the Rating
Agency, notices shall not be sent to the address specified by the
Depositor's designation.
SECTION 17. Access to Certain Documentation. Access to
documentation regarding the Term Assets will be afforded without
charge to any Certificateholder so requesting pursuant to Section
3.9 of the Agreement. Additionally, the Trustee shall provide at
the request of any Certificateholder without charge to such
Certificateholder the name and address of each Certificateholder
of Certificates hereunder as recorded in the Certificate Register
for purposes of contacting the other Certificateholders with
respect to their rights hereunder or for the purposes of
effecting purchases or sales of the Certificates, subject to the
transfer restrictions set forth herein.
SECTION 18. Ratification of Agreement. With respect to
the Series issued hereby, the Agreement, as supplemented by this
Series Supplement, is in all respects ratified and confirmed and
the Agreement as so supplemented by this Series Supplement shall
be read, taken and construed as one and the same instrument. To
the extent there is any inconsistency between the terms of the
Agreement and this Series Supplement, the terms of this Series
Supplement shall govern.
SECTION 19. Counterparts. This Series Supplement may be
executed in any number of counterparts, each of which so executed
shall be deemed to be an original, but all of such counterparts
shall together constitute but one and the same instrument.
8
<PAGE>
SECTION 20. Governing Law. This Series Supplement and
each Certificate issued hereunder shall be construed in
accordance with and governed by the law of the State of New York
without regard to principles of conflicts of law.
SECTION 21. Tax Election. In mutual consideration for
each Certificateholder's purchase of a Certificate, each
Certificateholder acknowledges that it intends that the Trust be
excluded from the application of the rules of subchapter K of the
Code in the event that the Internal Revenue Service successfully
recharacterizes the Trust as a partnership for federal income tax
purposes, and will be deemed to have consented to the making of a
protective election pursuant to Treasury Regulation Section
1.761-2 as of the date hereof.
SECTION 22. Covenant of Depositor. The Depositor hereby
covenants that it will be adequately capitalized at all times.
* * * * *
9
<PAGE>
IN WITNESS WHEREOF, the Depositor and the Trustee have
caused this Series Supplement to be duly executed by their
respective officers thereunto duly authorized as of the day and
year first above written.
PRUDENTIAL SECURITIES STRUCTURED ASSETS,
INC., as Depositor
By /s/ Terrence O'Dwyer
-----------------------------------
Name: Terrence O'Dwyer
Title: Senior Vice President
THE BANK OF NEW YORK,
a New York banking corporation,
as Trustee
By /s/ Fred Acebedo
-----------------------------------
Name: Fred Acebedo
Title: Assistant Treasurer
10
<PAGE>
Exhibit A
[Form of Amortizing Class Certificate]
NUMBER Certificate Notional Amount $____________
R-___ Aggregate Class Notional Amount $____________
CUSIP NO. ____________
SEE REVERSE FOR CERTAIN DEFINITIONS
THE HOLDER OF THIS CERTIFICATE SHALL HAVE NO RIGHT TO
PRINCIPAL PAYMENTS IN RESPECT OF THE TERM ASSETS EXCEPT IN THE
EVENT OF A MATURITY SHORTENING REDEMPTION (AS SUCH TERMS ARE
DEFINED IN THE TRUST AGREEMENT REFERRED TO HEREIN) ON OR PRIOR TO
JULY 1, 2017. THE REGISTERED HOLDER HEREOF, BY ITS ACCEPTANCE
HEREOF, AGREES THAT IT WILL LOOK SOLELY TO THE TRUST PROPERTY (TO
THE EXTENT OF ITS RIGHTS THEREIN) FOR DISTRIBUTIONS HEREUNDER.
THIS CERTIFICATE REPRESENTS A FRACTIONAL UNDIVIDED
INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR
AN INTEREST IN, AND IS NOT GUARANTEED BY THE DEPOSITOR OR THE
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE TRUST ASSETS ARE INSURED OR GUARANTEED BY ANY
GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
[THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER JURISDICTION.]1
[UNLESS THE CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY, A NEW YORK
CORPORATION, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]2
_________________________
1 Bracketed Legend Omitted in Exchange Certificates
2 Bracketed Legend Included in Exchange Certificate
Only.
A-1
<PAGE>
RECEIPTS ON CORPORATE SECURITIES TRUST, SERIES FDX 1997-1
RECEIPTS OF CORPORATE SECURITIES
SERIES FDX 1997-1
Amortizing Class evidencing a fractional undivided
beneficial ownership interest in the Trust, as defined below, the
property of which consists of $52,000,000 aggregate principal
amount of 7.60% Notes due July 1, 2097 (the "Term Assets") issued
by Federal Express Corporation (the "Term Assets Issuer") and
deposited in the Trust by the Depositor, as defined below. The
Term Assets were purchased by the Trust from Prudential
Securities Structured Assets, Inc. (the "Depositor") in exchange
for the transfer of the Certificates to the Depositor by the
Trust.
A. THIS CERTIFIES THAT [ ] is the registered owner of
a nonassessable, fully-paid, fractional undivided interest in
Receipts on Corporate Securities Trust, Series FDX 1997-1 formed
by the Depositor. Under the Trust Agreement, there will be
distributed on the first day of each January and July, or if such
day if not a Scheduled Distribution Date, then the immediately
following Scheduled Distribution Date, commencing January 1, 1998
through and including July 1, 2017, except upon the occurrence of
an Shortened Maturity Redemption or an In-Kind Distribution, to
the Holders of the Amortizing Class Certificates, the Interest
Collections constituting Available Funds (as defined below). With
respect to any distribution to the Amortizing Class Certificates
(as defined below), the percentage of such distribution to which
this Certificateholder is entitled on any such Distribution Date
is such Certificateholder's Percentage Interest of the
distribution. In the event of a Shortened Maturity Redemption,
the Trustee shall distribute the amount received from the Term
Assets Issuer on or with respect to any Shortened Maturity Date
to the Holders of the Residual Class Certificates and the
Amortizing Class Certificates, respectively, in same ratio as (i)
the present value of all scheduled future payments on the Term
Assets after July 1, 2017 bears to (ii) the present value of all
scheduled future payments on the Amortizing Class Certificates,
discounted semiannually in each case at a rate of 7.60% per annum
to the date of the Shortened Maturity Redemption. Such amounts
shall be calculated by the Calculation Agent. In the event of an
In-Kind Distribution, pursuant to Section 3.6 of the Agreement,
the Trustee shall make such In-Kind Distribution to the Holders
of the Residual Class Certificates and the Holders of the
Amortizing Class Certificates, respectively, in the same ratio as
(i) the present value of all scheduled future payments on the
Term Assets after July 1, 2017 bears to (ii) the present value of
all scheduled future payments on the Amortizing Class
Certificates, discounted semiannually in each case at a rate of
7.60% per annum to the date on which such payment default or
acceleration of the Term Assets occurred. Such amounts shall be
calculated by the Calculation Agent.
The Trust was created pursuant to a Base Trust
Agreement dated as of August 28, 1997 (the "Agreement"), between
the Depositor and The Bank of New York, a New York banking
corporation, not in its individual capacity but solely as Trustee
(the "Trustee"), as supplemented by the Series FDX 1997-1
Supplement dated as of August 28, 1997 (the "Series Supplement"
and, together with the Agreement, the "Trust Agreement"), between
the Depositor and the Trustee. This Certificate does not purport
to summarize the Trust Agreement and reference is hereby made to
the Trust Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties
evidenced hereby and the rights, duties and obligations of the
Trustee with respect hereto. A copy of the Trust Agreement may be
obtained from the Trustee by written request sent to the
Corporate Trust Office. Capitalized terms used but not defined
herein have the meanings assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates
designated as "Receipts of Corporate Securities, Series FDX
1997-1, Amortizing Class Certificates" (herein called the
"Amortizing Class Certificates"). The Trust is also issuing
certificates designated as "Receipts of Corporate Securities,
Series FDX 1997-1, Residual Class Certificates" (hereinafter
called the "Residual Class Certificates" and together with the
Amortizing Class Certificates, the "Certificates") pursuant to
the Trust Agreement. This Certificate is issued under and is
subject to
A-2
<PAGE>
the terms, provisions and conditions of the Trust Agreement, to
which Trust Agreement the Holder of this Certificate by virtue of
the acceptance hereof assents and by which such Holder is bound.
The property of the Trust consists of the Term Assets and all
payments on or collections in respect of the Term Assets accrued
on or after the Closing Date, all as more fully specified in the
Trust Agreement.
Subject to the terms and conditions of the Trust
Agreement (including the availability of funds for distribution)
and until the obligation created by the Trust Agreement shall
have terminated in accordance therewith, distributions will be
made on each Distribution Date to the Person in whose name this
Certificate is registered on the applicable Record Date. The
Record Date applicable to any Distribution Date is the 15th day
immediately preceding such Distribution Date.
Distributions made on this Certificate will be made as
provided in the Trust Agreement by the Trustee by wire transfer
or credit to the appropriate account of the Holder in immediately
available funds, without the presentation or surrender of this
Certificate or the making of any notation hereon. Except as
otherwise provided in the Trust Agreement and notwithstanding the
above, the final distribution on this Certificate will be made
after due notice by the Trustee of the tendency of such
distribution and only upon presentation and surrender of this
Certificate at the office or agency maintained for that purpose
by the Trustee in the Borough of Manhattan, the City of New York.
Reference is hereby made to the further provisions of
this Certificate set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon has
been executed by or on behalf of the Trustee, by manual
signature, this Certificate shall not entitle the holder hereof
to any benefit under the Trust Agreement or be valid for any
purpose.
It is the intent of the Depositor and the
Certificateholders that, for purposes of federal income, state
and local income and franchise taxes and any other taxes imposed
upon, measured by or based upon gross or net income, the Trust
shall be treated as a grantor trust or, failing that, as a
partnership that is not treated as an association (or publicly
traded partnership) taxable as a corporation, and the Trust
Agreement shall be interpreted accordingly. Except as otherwise
required by appropriate taxing authorities, the Depositor and the
other Certificateholders by acceptance of a Certificate, agree to
treat, the Certificates for such tax purposes as interests in
such grantor trust. It is also the intent of the Depositor and
the Certificateholders that the Trust be excluded from the
application of the rules of subchapter K of the Code in the event
that the Internal Revenue Service successfully recharacterizes
the Trust as a partnership for federal income tax purposes, and
that a protective election pursuant to Treasury Regulation
Section 1.761-2 be made as of the date of formation of the Trust.
A-3
<PAGE>
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed as of the date set forth below.
THE BANK OF NEW YORK,
a New York banking corporation
BY:____________________________
Authorized Signatory
DATED: [ ], 1997
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Amortizing Class Certificates described in the
Trust Agreement referred to herein.
THE BANK OF NEW YORK,
a New York banking corporation, not in its
individual capacity but solely as Trustee,
BY:_____________________________
Authorized Signatory
A-4
<PAGE>
(REVERSE OF TRUST CERTIFICATE)
The Certificates are limited in right of distribution
to certain payments and collections respecting the Trust
Agreement, all as more specifically set forth herein and in the
Trust Agreement. The registered Holder hereof, by its acceptance
hereof, agrees that it will look solely to the Term Assets (to
the extent of its rights therein) for distributions hereunder.
Subject to the next paragraph and to certain
exceptions provided in the Trust Agreement, the Trust Agreement
permits the amendment thereof and the modification of the rights
and obligations of the Depositor and the Trustee and the rights
of the Certificateholders under the Trust Agreement at any time
by the Depositor and the Trustee with the consent of the Holders
of Certificates evidencing greater than 66-2/3% of the aggregate
Voting Rights of each Outstanding Class of Certificates subject
to certain provisions set forth in the Trust Agreement. Any such
consent by the Holder of this Certificate (or any predecessor
Certificate) shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange hereof
or in lieu hereof whether or not notation of such consent is made
upon this Certificate. The Trust Agreement also permits the
amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
The Certificates are issuable in fully registered form
only in minimum original notional amounts of $250,000 and
integral multiples of $1.00 in excess thereof (in the case of the
Amortizing Class) or minimum original principal amount of
$500,000 and integral multiples of $1,000 in excess thereof (in
the case of the Residual Class Certificates). As provided in the
Trust Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates of the
same principal amount, Class, original issue date and maturity,
in authorized denominations as requested by the Holder
surrendering the same.
As provided in the Trust Agreement and subject to
certain limitations therein set forth, the transfer of this
Certificate is registrable in the Certificate Register upon
surrender of this Certificate for registration of transfer at the
offices or agencies of the Certificate Registrar maintained by
the Trustee in the Borough of Manhattan, The City of New York,
duly endorsed by, or accompanied by an assignment in the form
below and by such other documents as required by the Trust
Agreement signed by, the Holder hereof, and thereupon one or more
new Certificates of the same Class in authorized denominations
evidencing the same principal amount will be issued to the
designated transferee or transferees. The Certificate Registrar
appointed under the Trust Agreement is The Bank of New York.
No service charge will be made for any registration of
transfer or exchange, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of
Certificates.
The Depositor and the Trustee and any agent of the
Depositor or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes,
and neither the Depositor, the Trustee, nor any such agent shall
be affected by any notice to the contrary.
The Trust and the obligations of the Depositor and the
Trustee created by the Trust Agreement with respect to the
Certificates will terminate upon (i) the distribution of the Term
Assets to the Residual Class Certificateholders on July 1, 2017,
(ii) the payment in full of the Certificates after a Shortened
Maturity Redemption, or (iii) an occurrence of an In-Kind
Distribution.
A-5
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells,
assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
- ------------------------------------------------------------------------------
the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
- ------------------------------------------------------------------------------
Attorney to transfer said Trust Certificate on the books of the
Certificate Registrar, with full power of substitution in the
premises.
Dated:
*
---------------------------
Signature Guaranteed;
*
---------------------------
* NOTICE: The signature to this assignment must correspond with
the name as it appears upon the face of the within Trust
Certificate in every particular, without alteration, enlargement
or any change whatever. Such signature must be guaranteed by an
"eligible guarantor institution" meeting the requirements of the
Certificate Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee
program" as may be determined by the Certificate Registrar in
addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
[TO BE COMPLETED BY PURCHASER:
The undersigned represents and warrants that it is an
institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act of 1933, as amended.
Dated:------- ---------------------------*]3
(Signature)
- --------
3 Bracketed Certification Omitted in Exchange Certificates
A-6
<PAGE>
Exhibit B
[Form of Residual Class Certificate]
NUMBER Certificate Principal Balance $____________
R-___ Aggregate Class Principal Balance $____________
CUSIP NO. ____________
SEE REVERSE FOR CERTAIN DEFINITIONS
THE HOLDER OF THIS CERTIFICATE SHALL HAVE NO RIGHT TO
PAYMENTS IN RESPECT OF THE TERM ASSETS EXCEPT IN THE EVENT OF A
MATURITY SHORTENING REDEMPTION (AS SUCH TERMS ARE DEFINED IN THE
TRUST AGREEMENT REFERRED TO HEREIN) ON OR PRIOR TO JULY 1, 2017.
THE REGISTERED HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, AGREES
THAT IT WILL LOOK SOLELY TO THE TRUST PROPERTY (TO THE EXTENT OF
ITS RIGHTS THEREIN) FOR DISTRIBUTIONS HEREUNDER.
THIS CERTIFICATE REPRESENTS A FRACTIONAL UNDIVIDED
INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR
AN INTEREST IN, AND IS NOT GUARANTEED BY THE DEPOSITOR OR THE
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE TRUST ASSETS ARE INSURED OR GUARANTEED BY ANY
GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
[THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER JURISDICTION.]4
THE RESIDUAL CLASS CERTIFICATES MAY ONLY BE HELD BY
PERSONS WHO CERTIFY THAT THE BENEFICIAL OWNER THEREOF IS EXEMPT
FROM WITHHOLDING UNDER U.S. FEDERAL INCOME TAX LAWS.
RECEIPTS ON CORPORATE SECURITIES TRUST, SERIES FDX 1997-1
Receipts of Corporate Securities
Series FDX 1997-1
Residual Class evidencing a fractional undivided
beneficial ownership interest in the Trust, as defined below, the
property of which consists of $52,000,000 aggregate principal
amount of 7.60% Notes due July 1, 2097 (the "Term Assets") issued
by Federal Express Corporation (the "Term Assets Issuer") and
deposited in the Trust by the Depositor, as defined below. The
Term Assets were purchased by the Trust from Prudential
Securities
- ----------------
4 Bracketed Legend Omitted in Exchange Certificates
B-1
<PAGE>
Structured Assets, Inc. (the "Depositor") in exchange
for the transfer of the Certificates to the Depositor by the
Trust.
(b) THIS CERTIFIES THAT [ ] is the registered owner of a
nonassessable, fully-paid, fractional undivided interest in
Receipts on Corporate Securities Trust, Series FDX 1997-1 formed
by the Depositor. Under the Trust Agreement, this Certificate
will be terminated and deemed involuntarily surrendered by the
holder hereof in exchange for a principal amount of the Term
Assets underlying this Certificate equal to the Certificate
Principal Balance hereof on July 1, 2017, unless a Shortened
Maturity Redemption or an In-Kind Distribution (as such terms are
defined in the Trust Agreement) has occurred on or prior to such
date. With respect to any distribution to the Residual Class
Certificates (as defined below) the percentage of such
distribution to which this Certificateholder is entitled on any
such Distribution Date is such Certificateholder's Percentage
Interest of such distribution. In the event of a Shortened
Maturity Redemption, the Trustee shall distribute the amount
received from the Term Assets Issuer on or with respect to any
Shortened Maturity Date to the Holders of the Residual Class
Certificates and the Amortizing Class Certificates, respectively,
in same ratio as (i) the present value of all scheduled future
payments on the Term Assets after July 1, 2017 bears to (ii) the
present value of all scheduled future payments on the Amortizing
Class Certificates, discounted semiannually in each case at a
rate of 7.60% per annum to the date of the Shortened Maturity
Redemption. Such amounts shall be calculated by the Calculation
Agent. In the event of an In-Kind Distribution, pursuant to
Section 3.6 of the Agreement, the Trustee shall make such In-Kind
Distribution to the Holders of the Residual Class Certificates
and the Holders of the Amortizing Class Certificates,
respectively, in the same ratio as (i) the present value of all
scheduled future payments on the Term Assets after July 1, 2017
bears to (ii) the present value of all scheduled future payments
on the Amortizing Class Certificates, discounted semiannually in
each case at a rate of 7.60% per annum to the date on which such
payment default or acceleration of the Term Assets occurred. Such
amounts shall be calculated by the Calculation Agent.
The Trust was created pursuant to a Base Trust
Agreement dated as of August 28, 1997 (the "Agreement"), between
the Depositor and The Bank of New York, a New York banking
corporation, not in its individual capacity but solely as Trustee
(the "Trustee"), as supplemented by the Series FDX 1997-1
Supplement dated as of August 28, 1997 (the "Series Supplement"
and, together with the Agreement, the "Trust Agreement"), between
the Depositor and the Trustee. This Certificate does not purport
to summarize the Trust Agreement and reference is hereby made to
the Trust Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties
evidenced hereby and the rights, duties and obligations of the
Trustee with respect hereto. A copy of the Trust Agreement may be
obtained from the Trustee by written request sent to the
Corporate Trust Office. Capitalized terms used but not defined
herein have the meanings assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized
Certificates designated as "Receipts of Corporate Securities,
Series FDX 1997-1, Residual Class Certificates" (herein called
the "Residual Class Certificates"). The Trust is also issuing
certificates designated as "Receipts of Corporate Securities,
Series FDX 1997-1, Amortizing Class Certificates" (hereinafter
called the "Amortizing Class Certificates" and together with the
Residual Class Certificates, the "Certificates") pursuant to the
Trust Agreement. This Certificate is issued under and is subject
to the terms, provisions and conditions of the Trust Agreement,
to which Trust Agreement the Holder of this Certificate by virtue
of the acceptance hereof assents and by which such Holder is
bound. The property of the Trust consists of the Term Assets and
all payments on or collections in respect of the Term Assets
accrued on or after the Closing Date, all as more fully specified
in the Trust Agreement.
Subject to the terms and conditions of the Trust
Agreement (including the availability of funds for distributions)
and until the obligation created by the Trust Agreement shall
have terminated in accordance therewith, distributions will be
made on each Distribution Date to the Person in whose name this
Certificate is registered on the applicable Record Date. The
Record Date applicable to any Distribution Date is the day
immediately preceding such Distribution Date.
Reference is hereby made to the further provisions of
this Certificate set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
B-2
<PAGE>
Unless the certificate of authentication hereon has
been executed by or on behalf of the Trustee, by manual
signature, this Certificate shall not entitle the holder hereof
to any benefit under the Trust Agreement or be valid for any
purpose.
It is the intent of the Depositor and the
Certificateholders that, for purposes of federal income, state
and local income and franchise taxes and any other taxes imposed
upon, measured by or based upon gross or net income, the Trust
shall be treated as a grantor trust or, failing that, as a
partnership that is not treated as an association (or publicly
traded partnership) taxable as a corporation or a public traded
partnership, and the Trust Agreement shall be interpreted
accordingly. Except as otherwise required by appropriate taxing
authorities, the Depositor and the other Certificateholders by
acceptance of a Certificate, agree to treat, the Certificates for
such tax purposes as interests in such grantor trust. It is also
the intent of the Depositor and the Certificateholders that the
Trust be excluded from the application of the rules of subchapter
K of the Code in the event that the Internal Revenue Service
successfully recharacterizes the Trust as a partnership for
federal income tax purposes, and that a protective election
pursuant to Treasury Regulation Section 1.761-2 be made as of the
date of formation of the Trust.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE HOLDER HEREOF SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
IN WITNESS WHEREOF, the Trustee has caused this
Certificate to be duly executed as of the date set forth below.
THE BANK OF NEW YORK,
a New York banking corporation,
By: ________________________________
Authorized Signatory
Dated: [ ], 1997
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Residual Class Certificates described in the
Trust Agreement referred to herein.
THE BANK OF NEW YORK,
a New York banking corporation, not in its
individual capacity but solely as Trustee,
By: ________________________________
Authorized Signatory
B-3
<PAGE>
(REVERSE OF TRUST CERTIFICATE)
The Certificates are limited in right of distribution
to certain payments and collections respecting the Trust
Agreement, all as more specifically set forth herein and in the
Trust Agreement. The registered Holder hereof, by its acceptance
hereof, agrees that it will look solely to the Term Assets (to
the extent of its rights therein) for distributions hereunder.
Subject to the next paragraph and to certain
exceptions provided in the Trust Agreement, the Trust Agreement
permits the amendment thereof and the modification of the rights
and obligations of the Depositor and the Trustee and the rights
of the Certificateholders under the Trust Agreement at any time
by the Depositor and the Trustee with the consent of the Holders
of Certificates evidencing greater than 66-2/3% of the aggregate
Voting Rights of each Outstanding Class of Certificates subject
to certain provisions set forth in the Trust Agreement. Any such
consent by the Holder of this Certificate (or any predecessor
Certificate) shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange hereof
or in lieu hereof whether or not notation of such consent is made
upon this Certificate. The Trust Agreement also permits the
amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
The Certificates are issuable in fully registered form
only in minimum original notional amounts of $250,000 and
integral multiples of $1.00 in excess thereof (in the case of the
Amortizing Class) or minimum original principal amount of
$500,000 and interal multiples of $1,000 in excess thereof (in
the case of the Residual Class Certificates). As provided in the
Trust Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates of the
same principal amount, Class, original issue date and maturity,
in authorized denominations as requested by the Holder
surrendering the same.
As provided in the Trust Agreement and subject to
certain limitations therein set forth, the transfer of this
Certificate is registrable in the Certificate Register upon
surrender of this Certificate for registration of transfer at the
offices or agencies of the Certificate Registrar maintained by
the Trustee in the Borough of Manhattan, The City of New York,
duly endorsed, by or accompanied by an assignment in the form
below and by such other documents as required by the Trust
Agreement signed by, the Holder hereof, and thereupon one or more
new Certificates of the same Class in authorized denominations
evidencing the same principal amount will be issued to the
designated transferee or transferees. The Certificate Registrar
appointed under the Trust Agreement is The Bank of New York.
No service charge will be made for any registration of
transfer or exchange, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of
Certificates.
The Depositor and the Trustee and any agent of the
Depositor or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes,
and neither the Depositor, the Trustee, nor any such agent shall
be affected by any notice to the contrary.
The Trust and the obligations of the Depositor and the
Trustee created by the Trust Agreement with respect to the
Certificates shall terminate upon (i) the distribution of the
Term Assets to the Residual Class Certificateholders on July 1,
2017, (ii) the payment in full of the Certificates after a
Maturity Shortening Redemption, or (iii) occurrence of an In-kind
Distribution.
B-4
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
- ------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
- ------------------------------------------------------------------------------
the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
- ------------------------------------------------------------------------------
Attorney to transfer said Trust Certificate on the books of the
Certificate Registrar, with full power of substitution in the
premises.
Dated:
------------------------ *
Signature Guaranteed;
*
------------------------
* NOTICE: The signature to this assignment must correspond with
the name as it appears upon the face of the within Trust
Certificate in every particular, without alteration, enlargement
or any change whatever. Such signature must be guaranteed by an
"eligible guarantor institution" meeting the requirements of the
Certificate Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee
program" as may be determined by the Certificate Registrar in
addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
B-5
<PAGE>
TO BE COMPLETED BY PURCHASER:
The undersigned represents and warrants that that the
beneficial owner hereof is either (i) a United States person, or
(ii) a non-United States person who is exempt from withholding
under U.S. federal income tax laws and has completed, accurately
and in a manner reasonably satisfactory to the Trustee or its
agent, an IRS Form W-8 and delivered such Form to the Trustee or
its agent.
Dated------- -----------------------
(Signature)
[The undersigned represents and warrants that it is an
institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act of 1933, as amended).
Dated------- -------------------------]5
(Signature)
- --------
5 Bracketed Certification Omitted in Exchange Certificates
B-6
<PAGE>
Schedule 1
IDENTIFICATION OF TERM ASSETS
Terms of Term Assets:
Term Assets Issuer:............ Federal Express Corporation
Term Assets:................... 7.60% Notes due July 1, 2097
Dated:......................... June 10, 1997
Original Principal Maturity Date: July 1, 2097
Original Principal Amount Issued: $250,000,000
CUSIP Number:.................. 313309AP1
Stated Interest Rate:.......... 7.60%
Interest Payment Dates:........ January 1 and July 1
Mode of Payment of Term Assets: By credit to the account of
the holder at DTC
Principal Amount of Term
Assets Deposited Under
Trust Agreement:............ $52,000,000
The Term Assets will be held by the Trustee for the
Owners of Certificates as book-entry credits to an account of the
Trustee at DTC.
Available Information
The Term Assets Issuer is subject to the information
requirements of the Securities Exchange Act of 1934 and in
accordance therewith files reports and other information with the
Commission. Such reports, proxy and information statements and
other information filed by the Term Assets Issuer with the
Commission can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's regional
offices at 500 West Madison Street, 14th Floor, Chicago, Illinois
60661 and 7 World Trade Center, Suite 1300, New York, New York
10078. Copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Commission
maintains a Web site at http://www.sec.gov containing reports,
proxy statements and other information regarding registrants that
file electronically with the Commission. In addition, certain
material described above and other information will also be
available for inspection at the offices of the New York Stock
Exchange at 20 Broad Street, New York, New York.
<PAGE>
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
---------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
---------------------------
PRUDENTIAL SECURITIES STRUCTURED ASSETS, INC.
(Exact name of obligor as specified in its charter)
on behalf of
RECEIPTS ON CORPORATE SECURITIES TRUST, SERIES FDX 1997-1
Delaware 31-0944462
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
One Seaport Plaza
New York, New York 10292
(Address of principal executive offices) (Zip code)
----------------------------
Receipts of Corporate Securities, Series FDX 1997-1,
Residual Class Certificate
(Title of the indenture securities)
=====+==========================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe
each such affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust
Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in
effect, which contains the authority to commence
business and a grant of powers to exercise corporate
trust powers. (Exhibit 1 to Amendment No. 1 to Form
T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration
Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration Statement No.
33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its supervising
or examining authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The
Bank of New York, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 22nd day of October, 1997.
THE BANK OF NEW YORK
By: /s/ Fernando Acebedo
--------------------------
Name: Fernando Acebedo
Title: Assistant Treasurer
<PAGE>
Exhibit 7
- -----------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business
June 30, 1997, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions
of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 7,769,502
Interest-bearing balances .......... 1,472,524
Securities:
Held-to-maturity securities ........ 1,080,234
Available-for-sale securities ...... 3,046,199
Federal funds sold and Securities pur-
chased under agreements to resell...... 3,193,800
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................35,352,045
LESS: Allowance for loan and
lease losses ..............625,042
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 34,726,574
Assets held in trading accounts ...... 1,611,096
Premises and fixed assets (including
capitalized leases) ................ 676,729
Other real estate owned .............. 22,460
Investments in unconsolidated
subsidiaries and associated
companies .......................... 209,959
Customers' liability to this bank on
acceptances outstanding ............ 1,357,731
Intangible assets .................... 720,883
Other assets ......................... 1,627,267
-----------
Total assets ......................... $57,514,958
===========
<PAGE>
LIABILITIES
Deposits:
In domestic offices ................ $26,875,596
Noninterest-bearing ......11,213,657
Interest-bearing .........15,661,939
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 16,334,270
Noninterest-bearing .........596,369
Interest-bearing .........15,737,901
Federal funds purchased and Securities
sold under agreements to repurchase. 1,583,157
Demand notes issued to the U.S.
Treasury ........................... 303,000
Trading liabilities .................. 1,308,173
Other borrowed money:
With remaining maturity of one year
or less .......................... 2,383,570
With remaining maturity of more than
one year through three years.......... 0
With remaining maturity of more than
three years ......................... 20,679
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,377,244
Subordinated notes and debentures .... 1,018,940
Other liabilities .................... 1,732,792
-----------
Total liabilities .................... 52,937,421
-----------
EQUITY CAPITAL
Common stock ........................ 1,135,284
Surplus ............................. 731,319
Undivided profits and capital
reserves .......................... 2,721,258
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 1,948
Cumulative foreign currency transla-
tion adjustments .................. ( 12,272)
------------
Total equity capital ................ 4,577,537
-----------
Total liabilities and equity
capital ........................... $57,514,958
===========
<PAGE>
I, Robert E. Keilman, Senior Vice President and Comptroller
of the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System
and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by
us and to the best of our knowledge and belief has been prepared
in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
-
Alan R. Griffith |
J. Carter Bacot |
Thomas A. Renyi | Directors
-
[Execution Copy]
Receipts on Corporate Securities Trust, Series FDX 1997-1
$52,000,000 Residual Class Certificates
Prudential Securities Structured Assets, Inc.
Depositor
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is
made and entered into as of August 25, 1997 by and between
Prudential Securities Structured Assets, Inc., a Delaware
corporation (the "Company"), and Prudential Securities
Incorporated (the "Initial Purchaser"), which has agreed pursuant
to the Purchase Agreement described below to purchase from the
Company an aggregate of $52,000,000 in certificate principal
amount of Receipts of Corporate Securities, Series FDX 1997-1,
Residual Class Certificates (the "Initial Certificates"). The
Initial Certificates evidence a class of undivided interest in
Receipts on Corporate Securities Trust, Series FDX 1997-1 (the
"Trust") to be formed pursuant to the Trust Agreement to be dated
as of August 28, 1997, between the Company, as depositor, and The
Bank of New York, as trustee (together with any successor
trustee, the "Trustee"), as supplemented by the Series FDX 1997-1
Supplement, to be dated as of August 28, 1997 (together, and as
amended from time to time, the "Trust Agreement"). The property
of the Trust will consist principally of $52,000,000 aggregate
principal amount of 7.60% Notes due July 1, 2097 (the "Term
Assets") issued by Federal Express Corporation ("FDX") and
transferred by the Company to the Trust in exchange for the
Initial Certificates and certain other interests in the Trust.
This Agreement is made pursuant to the Purchase Agreement,
dated August 25, 1997 (the "Purchase Agreement"), by and between
the Company and the Initial Purchaser. In order to induce the
Initial Purchaser to purchase the Initial Certificates, the
Company has agreed to provide the registration rights set forth
in this Agreement. The execution and delivery of this Agreement
is a condition to the obligations of the Initial Purchaser under
the Purchase Agreement.
The parties hereby agrees as follows:
Section 1. Definitions. As used in this Agreement, the
following capitalized terms shall have the following meanings:
Act: The Securities Act of 1933, as amended.
Affiliate: With respect to any specified person, any other
person that, directly or indirectly, is in control of, is
controlled by, or is under common control with, such specified
person. For purposes of this definition, control of a person
means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person
<PAGE>
whether by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Broker-Dealer Transfer Restricted Securities: The Exchange
Certificates that are acquired by a Broker-Dealer in the Exchange
Offer in exchange for Initial Certificates that such
Broker-Dealer acquired for its own account as a result of
market-making activities or other trading activities (other than
Initial Certificates acquired directly from any of the Company or
its Affiliates).
Business Day: Any day except a Saturday, Sunday or other
day in the City of New York, or in the city of the corporate
trust office of the Trustee, on which banks are authorized to
close.
Certificated Securities: As defined in the Trust Agreement.
Certificates: The Initial Certificates and the Exchange Certificates.
Closing Date: As defined in the Purchase Agreement.
Commission: The Securities and Exchange Commission.
Consummate: The Exchange Offer shall be deemed
"Consummated" for purposes of this Agreement upon the occurrence
of (a) the filing and effectiveness under the Act of the Exchange
Offer Registration Statement relating to the Exchange
Certificates to be issued in the Exchange Offer, (b) the
maintenance of such Registration Statement continuously effective
and the keeping of the Exchange Offer open for a period not less
than the minimum period required pursuant to Section 2(b) hereof,
and (c) the issuance by the Trustee pursuant to the Trust
Agreement of the Exchange Certificates in the same aggregate
principal amount as the aggregate principal amount of the Initial
Certificates tendered by Holders thereof pursuant to the Exchange
Offer.
Distribution Date: As defined in the Trust Agreement
and the Certificates.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Certificates: Any of the Receipts of Corporate
Securities, Series FDX 1997-1, Residual Class Certificates to be
issued pursuant to the Trust Agreement (i) in the Exchange Offer,
(ii) in exchange for Exchange Certificates or (iii) upon the
request of any Holder of Initial Certificates covered by a Shelf
Registration Statement, in exchange for such Initial
Certificates.
Exchange Offer: The registration by the Company on
behalf of the Trust under the Act of the Exchange Certificates
pursuant to the Exchange Offer Registration Statement pursuant to
which the Company on behalf of the Trust shall offer the Holders
of all outstanding
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Transfer Restricted Securities the opportunity to exchange all
such outstanding Transfer Restricted Securities for Exchange
Certificates in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities
tendered in such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration
Statement relating to the Exchange Offer, including the related
Prospectus.
Exempt Resales: The transactions in which the Initial
Purchaser proposes to sell the Initial Certificates to certain
"qualified institutional buyers," as such term is defined in Rule
144A under the Act.
Holders: With respect to a Transfer Restricted
Security, the owner thereof.
Indemnified Holder: As defined in Section 6(a).
NASD: National Association of Securities Dealers, Inc.
Person: An individual, partnership, corporation, trust,
unincorporated organization, or a government or agency or
political subdivision thereof.
Prospectus: The prospectus included in a Registration
Statement at the time such Registration Statement is declared
effective, as amended or supplemented by any prospectus
supplement and by all other amendments thereto, including
post-effective amendments, and all material incorporated by
reference into such Prospectus.
Registrar: As defined in the Trust Agreement.
Registration Default: As defined in Section 4.
Registration Statement: Any registration statement filed by
the Company on behalf of the Trust relating to (a) an offering of
Exchange Certificates pursuant to an Exchange Offer or (b) the
registration for resale of Transfer Restricted Securities
pursuant to the Shelf Registration Statement, in each case, (i)
which is filed pursuant to the provisions of this Agreement and
(ii) including the Prospectus included therein, all amendments
and supplements thereto (including post-effective amendments) and
all exhibits and material incorporated by reference therein.
Restricted Broker-Dealer: Any Broker-Dealer which holds
Broker-Dealer Transfer Restricted Securities.
Shelf Registration Statement: As defined in Section 3(a).
TIA: The Trust Indenture Act of 1939, as in effect on
the date of the Trust Agreement.
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<PAGE>
Transfer Restricted Securities: Each Certificate, until the
earliest to occur of (a) the date on which such Certificate is
exchanged in the Exchange Offer and entitled to be resold to the
public by the Holder thereof without complying with the
prospectus delivery requirements of the Act, (b) the date on
which such Certificate has been disposed of in accordance with a
Shelf Registration Statement, (c) the date on which such
Certificate is disposed of by a Broker-Dealer pursuant to the
"Plan of Distribution" contemplated by the Exchange Offer
Registration Statement (including delivery of the Prospectus
contained therein) or (d) the date on which such Certificate is
distributed to the public pursuant to Rule 144 under the Act.
Underwritten Offering: An offering in which
Certificates are sold to an underwriter for reoffering to the
public.
Section 2. Registered Exchange Offer.
(a) Unless (i) the Exchange Offer shall not be permitted by
applicable federal law (after the procedures set forth in Section
4(a)(i) below have been complied with), and (ii) the credit
rating assigned to FDX by both Standard and Poor's Rating
Services and Moody's Investor Service, Inc. falls below
investment grade prior to any of the periods described in this
Section 2(a) or Section 2(b) below, the Company shall (i) cause
the Exchange Offer Registration Statement to be filed with the
Commission within 60 days after the Closing Date, (ii) use its
best efforts to cause such Exchange Offer Registration Statement
to become effective at the earliest possible time, (iii) in
connection with the foregoing, (A) file all pre-effective
amendments to such Exchange Offer Registration Statement as may
be necessary in order to cause such Exchange Offer Registration
Statement to become effective, (B) file, if applicable, a
post-effective amendment to such Exchange Offer Registration
Statement pursuant to Rule 430A under the Act and (C) cause all
necessary filings, if any, in connection with the registration
and qualification of the Exchange Certificates to be made under
the Blue Sky laws of such jurisdictions as are necessary to
permit Consummation of the Exchange Offer and (iv) promptly after
the effectiveness of such Exchange Offer Registration Statement,
commence and Consummate the Exchange Offer. The Exchange Offer
shall be on the appropriate form permitting registration of the
Exchange Certificates to be offered in exchange for the Initial
Certificates that are Transfer Restricted Securities and to
permit sales of Broker-Dealer Transfer Restricted Securities by
Restricted Broker-Dealers as contemplated by Section 2(c) below.
(b) The Company will mail or cause to be mailed to each
Holder a copy of the Prospectus forming part of the Exchange
Offer Registration Statement, together with an appropriate letter
of transmittal and related documents. The Company shall use its
best efforts to cause the Exchange Offer Registration Statement
to be effective continuously, and shall keep the Exchange Offer
open for a period of not less than 30 days and not more than 45
days after the date notice of the Exchange Offer is mailed to the
Holders; provided, however, that in no event shall such period be
less than the minimum period required under applicable federal
and state securities laws to Consummate the Exchange Offer. The
Company shall cause the Exchange Offer to comply with all
applicable federal and state securities laws. No
4
<PAGE>
securities other than the Certificates shall be included in the
Exchange Offer Registration Statement. The Company shall use its
best efforts to cause the Exchange Offer to be Consummated on the
earliest practicable date after the Exchange Offer Registration
Statement has become effective, but in no event later than 210
days following the Closing Date.
(c) The Company shall include a "Plan of Distribution"
section in the Prospectus contained in the Exchange Offer
Registration Statement and indicate therein that any Restricted
Broker-Dealer which holds the Initial Certificates that are
Transfer Restricted Securities and that were acquired for the
account of such Broker-Dealer as a result of market-making
activities or other trading activities, may exchange such Initial
Certificates (other than Transfer Restricted Securities acquired
directly from the Company or an Affiliate thereof) pursuant to
the Exchange Offer; however, such Broker-Dealer may be deemed to
be an "underwriter" within the meaning of the Act and must,
therefore, deliver a prospectus meeting the requirements of the
Act in connection with its initial sale of each Exchange
Certificate received by such Broker-Dealer in the Exchange Offer,
which prospectus delivery requirement may be satisfied by the
delivery by such Broker-Dealer of the Prospectus contained in the
Exchange Offer Registration Statement; provided, however, that by
delivering a Prospectus, a Broker-Dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Act.
Such "Plan of Distribution" section shall also contain all other
information with respect to such sales of Broker-Dealer Transfer
Restricted Securities by Restricted Broker-Dealers that the
Commission may require in order to permit such sales pursuant
thereto, but such "Plan of Distribution" shall not name any such
Broker-Dealer or disclose the amount of the Certificates held by
any such Broker-Dealer, except to the extent required by the
Commission as a result of a change in policy after the date of
this Agreement.
The Company shall use its best efforts to keep the Exchange
Offer Registration Statement continuously effective, supplemented
and amended as required by the provisions of Section 4(c) below
to the extent necessary to ensure that it is available for sales
of Broker-Dealer Transfer Restricted Securities by Restricted
Broker-Dealers, and to ensure that such Registration Statement
conforms with the requirements of this Agreement, the Act and the
policies, rules and regulations of the Commission as announced
from time to time, for a period of one year from the date on
which the Exchange Offer is Consummated.
The Company shall promptly provide sufficient copies of the
latest version of such Prospectus to such Restricted
Broker-Dealers promptly upon request, and in no event later than
one day after such request, at any time during such one-year
period in order to facilitate such sales.
Section 3. Shelf Registration.
(a) Shelf Registration. Unless the credit rating assigned
to FDX by both Standard and Poor's Rating Services and Moody's
Investor Service, Inc. falls below investment grade prior to any
of the periods described in this Section 3(a), if (i) the Company
is not required to file an Exchange Offer Registration Statement
with respect to the Exchange Certificates because the
5
<PAGE>
Exchange Offer is not permitted by applicable law (after the
procedures set forth in Section 4(a)(i) below have been complied
with) or (ii) if any Holder of Transfer Restricted Securities
shall notify the Company within 20 Business Days following the
Consummation of the Exchange Offer that (A) such Holder was
prohibited by law or Commission policy from participating in the
Exchange Offer or (B) such Holder may not resell the Exchange
Certificates acquired by it in the Exchange Offer to the public
without delivering a prospectus and the Prospectus contained in
the Exchange Offer Registration Statement is not appropriate or
available for such resales by such Holder or (C) such Holder is a
Broker-Dealer and holds Initial Certificates acquired directly
from any of the Company or one of its Affiliates, then the
Company shall (x) cause to be filed, on or prior to 60 days after
the date on which the Company determine that they are not
required to file the Exchange Offer Registration Statement
pursuant to clause (i) above, or 60 days after the date on which
the Company receive the notice specified in clause (ii) above, a
shelf registration statement pursuant to Rule 415 under the Act
(which may be an amendment to the Exchange Offer Registration
Statement (in either event, the "Shelf Registration Statement"))
relating to all Transfer Restricted Securities the Holders of
which shall have provided the information required pursuant to
Section 3(b) hereof, and shall (y) use its best efforts to cause
such Shelf Registration Statement to become effective within 90
days after the date on which the Company become obligated to file
such Shelf Registration Statement. The Company shall use its best
efforts to keep the Shelf Registration Statement discussed in
this Section 4(a) continuously effective, supplemented and
amended as required by and subject to the provisions of Sections
4(b) and (c) hereof to the extent necessary to ensure that it is
available for sales of Transfer Restricted Securities by the
Holders thereof entitled to the benefit of this Section 3(a), and
to ensure that it conforms with the requirements of this
Agreement, the Act and the policies, rules and regulations of the
Commission as announced from time to time, for a period of not
more than one year (as extended pursuant to Section 4(c)(i))
following the date on which such Shelf Registration Statement
first becomes effective under the Act or such shorter period that
will terminate when all the Certificates covered by the Shelf
Registration Statement have been sold pursuant to the Shelf
Registration Statement.
(b) Provision by Holders of Certain Information in
Connection with the Shelf Registration Statement. No Holder of
Transfer Restricted Securities may include any of its Transfer
Restricted Securities in any Shelf Registration Statement
pursuant to this Agreement unless and until such Holder furnishes
to the Company in writing, within 20 days after receipt of a
request therefor, such information specified in item 507 of
Regulation S-K under the Act for use in connection with any Shelf
Registration Statement or Prospectus or preliminary prospectus
included therein. Each Holder as to which any Shelf Registration
Statement is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make
the information previously furnished to the Company by such
Holder not materially misleading.
Section 4. Registration Procedures.
6
<PAGE>
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company shall comply with all applicable
provisions of Section 4(c) below, shall use its best efforts to
effect such exchange and to permit the sale of Broker-Dealer
Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof, and shall
comply with all of the following provisions:
(i) If, following the date hereof there has been
published, or otherwise communicated by the staff of the
Commission (the "Staff") a change in Commission policy with
respect to exchange offers such as the Exchange Offer, such
that in the reasonable opinion of counsel to the Company
there is a substantial question as to whether the Exchange
Offer is permitted by applicable federal law, the Company
hereby agrees to seek a no-action letter or other favorable
decision from the Commission allowing the Company to
Consummate an Exchange Offer for such Initial Certificates.
The Company hereby agrees to pursue the issuance of such a
decision by the Staff. In connection with the foregoing,
the Company hereby agrees to take all such other actions as
are reasonably requested by the Staff or otherwise
reasonably required in connection with the issuance of such
decision, including without limitation (A) participating in
telephonic conferences with the Staff, (B) delivering to
the Commission staff an analysis prepared by counsel to the
Company setting forth the legal bases, if any, upon which
such counsel has concluded that such an Exchange Offer
should be permitted and (C) diligently pursuing a favorable
resolution (if possible) by the Commission staff of such
submission.
(ii) As a condition to its participation in the
Exchange Offer pursuant to the terms of this Agreement,
each Holder of Transfer Restricted Securities shall
furnish, upon the request of the Company, prior to the
Consummation of the Exchange Offer, a written
representation to the Company (which may be contained in
the letter of transmittal contemplated by the Exchange
Offer Registration Statement) to the effect that (A) it is
not an Affiliate of the Company or FDX, (B) it is not
engaged in, and does not intend to engage in, and has no
arrangement or understanding with any person to participate
in, a distribution of the Exchange Certificates to be
issued in the Exchange Offer and (C) it is acquiring the
Exchange Certificates in its ordinary course of business.
Each Holder hereby acknowledges and agrees that any
Broker-Dealer and any such Holder using the Exchange Offer
to participate in a distribution of the securities to be
acquired in the Exchange Offer (1) could not under
Commission policy as in effect on the date of this
Agreement rely on the position of the staff of the
Commission enunciated in Morgan Stanley and Co., Inc.
(available June 5, 1991) and Exxon Capital Holdings
Corporation (available May 13, 1988), as interpreted in the
Commission staff's letter to Shearman & Sterling dated July
2, 1993, and similar no-action letters (including, if
applicable, any no-action letter obtained pursuant to
clause (i) above), and (2) must comply with the
registration and prospectus delivery requirements of the
Act in connection with a secondary resale transaction and
that such a secondary resale transaction must be covered by
an effective registration statement containing the selling
security holder information required by Item 507 or 508, as
7
<PAGE>
applicable, of Regulation S-K if the resales are of
Exchange Certificates obtained by such Holder in exchange
for Initial Certificates acquired by such Holder directly
from any of the Company or an Affiliate thereof.
(iii) Prior to effectiveness of the Exchange Offer
Registration Statement, the Company shall provide a
supplemental letter to the Commission (A) stating that the
Company is registering the Exchange Offer in reliance on
the position of the staff of the Commission enunciated in
Exxon Capital Holdings Corporation (available May 13,
1988), Morgan Stanley and Co., Inc. (available June 5,
1991) and, if applicable, any no-action letter obtained
pursuant to clause (i) above, (B) including a
representation that the Company has not entered into any
arrangement or understanding with any Person to distribute
the Exchange Certificates to be received in the Exchange
Offer and that, to the best of the Company's information
and belief, each Holder participating in the Exchange Offer
is acquiring the Exchange Certificates in its ordinary
course of business and has no arrangement or understanding
with any Person to participate in the distribution of the
Exchange Certificates received in the Exchange Offer and
(C) any other undertaking or representation required by the
Commission as set forth in any no-action letter obtained
pursuant to clause (i) above.
(b) Shelf Registration Statement. In connection with the
Shelf Registration Statement, the Company shall comply with all
the provisions of Section 4(c) below and shall use its best
efforts to effect such registration to permit the sale of the
Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof (as indicated
in the information furnished to the Company pursuant to Section
3(b)), and pursuant thereto the Company will prepare and file
with the Commission a Registration Statement relating to the
registration on any appropriate form under the Act, which form
shall be available for the sale of the Transfer Restricted
Securities in accordance with the intended method or methods of
distribution thereof within the time periods and otherwise in
accordance with the provisions hereof.
(c) General Provisions. In connection with any Registration
Statement and any related Prospectus required by this Agreement
to permit the sale or resale of Transfer Restricted Securities
(including, without limitation, any Exchange Offer Registration
Statement and the related Prospectus, to the extent that the same
are required to be available to permit sales of Broker-Dealer
Transfer Restricted Securities by Restricted Broker-Dealers), the
Company shall:
(i) use its best efforts to keep such Registration
Statement continuously effective and provide all requisite
financial statements for the period specified in Section 2
or 3 of this Agreement, as applicable. Upon the occurrence
of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to
contain a material misstatement or omission or (B) not to
be effective and usable for resale of Transfer Restricted
Securities during the period required by this Agreement,
the Company shall file promptly an appropriate amendment to
such Registration Statement, (1) in the case of clause (A),
correcting any such misstatement or omission,
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<PAGE>
and (2) in the case of clauses (A) and (B), use its best
efforts to cause such amendment to be declared effective
and such Registration Statement and the related Prospectus
to become usable for its intended purposes as soon as
practicable thereafter, and shall advise the
underwriter(s), if any, and selling Holders of Certificates
covered by such Registration Statement (and, if requested
by such Persons, confirm such advice in writing) of any
circumstances covered by clause (A) or (B);
(ii) prepare and file with the Commission such
amendments and post-effective amendments to the
Registration Statement as may be necessary to keep the
Registration Statement effective for the applicable period
set forth in Section 2 or 3, or such shorter period as will
terminate when all Transfer Restricted Securities covered
by such Registration Statement have been sold; cause the
Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to
Rule 424 under the Act, and to comply fully with Rules 424,
430A, 434 and 462, as applicable, under the Act in a timely
manner; and comply with the provisions of the Act with
respect to the disposition of all securities covered by
such Registration Statement during the applicable period in
accordance with the intended method or methods of
distribution by the sellers thereof set forth in such
Registration Statement or supplement to the Prospectus;
(iii) advise the underwriter(s), if any, and selling
Holders promptly (and, if requested by such Persons,
confirm such advice in writing), (A) when the Prospectus or
any Prospectus supplement or post-effective amendment has
been filed, and, with respect to any Registration Statement
or any post-effective amendment thereto, when the same has
become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information
relating thereto, (C) of the issuance by the Commission of
any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension
by any state securities commission of the qualification of
the Transfer Restricted Securities for offering or sale in
any jurisdiction, or the initiation or threatening of any
proceeding for any of the preceding purposes, (D) of the
existence of any fact or the happening of any event that
makes any statement of a material fact made in the
Registration Statement, the Prospectus, any amendment or
supplement thereto or any document incorporated by
reference therein untrue, or that requires the making of
any additions to or changes in the Registration Statement
in order to make the statements therein not misleading, or
that requires the making of any additions to or changes in
the Prospectus in order to make the statements therein, in
the light of the circumstances under which they were made,
not misleading. If at any time the Commission shall issue
any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission
or other regulatory authority shall issue an order
suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under
state securities or Blue Sky laws, the Company shall use
its best efforts to obtain the withdrawal or lifting of
such order at the earliest possible time;
9
<PAGE>
(iv) furnish to the Initial Purchaser, each selling Holder
named in any Registration Statement or Prospectus and each
of the underwriter(s) in connection with such sale, if any,
before filing with the Commission, copies of any
Registration Statement or any Prospectus included therein
or any amendments or supplements to any such Registration
Statement or Prospectus (but excluding all documents
incorporated by reference after the initial filing of such
Registration Statement), which documents will be subject to
the review and comment of such Holders and underwriter(s)
in connection with such sale, if any, for a period of at
least five Business Days, and the Company will not file any
such Registration Statement or Prospectus or any amendment
or supplement to any such Registration Statement or
Prospectus (excluding all such documents incorporated by
reference) to which the selling Holders of the Transfer
Restricted Securities covered by such Registration
Statement or the underwriter(s) in connection with such
sale, if any, shall reasonably object within five Business
Days after the receipt thereof. A selling Holder or
underwriter, if any, shall be deemed to have reasonably
objected to such filing if such Registration Statement,
amendment, Prospectus or supplement, as applicable, as
proposed to be filed, contains a material misstatement or
omission or fails to comply with the applicable
requirements of the Act;
(v) make available at reasonable times for inspection
by the selling Holders, any managing underwriter
participating in any disposition pursuant to such
Registration Statement and any attorney or accountant
retained by such selling Holders or any of such
underwriter(s), all financial and other records relating to
the Trust, and cause the officers, directors and employees
of the Company to supply all readily obtainable information
reasonably requested by any such Holder, underwriter,
attorney or accountant in connection with such Registration
Statement or any post-effective amendment thereto
subsequent to the filing thereof and prior to its
effectiveness;
(vi) if requested by any selling Holders or the
underwriter(s) in connection with such sale, if any,
promptly include in any Registration Statement or
Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling
Holders and underwriter(s), if any, may reasonably request
to have included therein, including, without limitation,
information relating to the "Plan of Distribution" of the
Transfer Restricted Securities, information with respect to
the principal amount of Transfer Restricted Securities
being sold to such underwriter(s), the purchase price being
paid therefor and any other terms of the offering of the
Transfer Restricted Securities to be sold in such offering;
and make all required filings of such Prospectus supplement
or post-effective amendment as soon as practicable after
the Company is notified of the matters to be included in
such Prospectus supplement or post-effective amendment;
(vii) furnish to each selling Holder and each of the
underwriter(s) in connection with such sale, if any,
without charge, at least one copy of the Registration
Statement, as first filed with the Commission, and of each
amendment thereto, including all
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<PAGE>
documents incorporated by reference therein and all
exhibits (including exhibits incorporated therein by reference);
(viii) deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of
the Prospectus (including each preliminary prospectus) and
any amendment or supplement thereto as such Persons
reasonably may request; the Company hereby consents to the
use (in accordance with law) of the Prospectus and any
amendment or supplement thereto by each of the selling
Holders and each of the underwriter(s), if any, in
connection with the offering and the sale of the Transfer
Restricted Securities covered by the Prospectus or any
amendment or supplement thereto;
(ix) enter into such agreements (including an
underwriting agreement) and make such representations and
warranties and take all such other actions in connection
therewith in order to expedite or facilitate the
disposition of the Transfer Restricted Securities pursuant
to any Registration Statement contemplated by this
Agreement as may be reasonably requested by any Holder of
Transfer Restricted Securities or underwriter in connection
with any sale or resale pursuant to any Registration
Statement contemplated by this Agreement, and in such
connection, whether or not an underwriting agreement is
entered into and whether or not the registration is an
Underwritten Offering, the Company shall:
(A) furnish (or in the case of paragraph (2), use
its best efforts to furnish) to each selling Holder
and each underwriter, if any, upon the effectiveness
of the Shelf Registration Statement and each
post-effective amendment thereto and to each
Restricted Broker-Dealer upon Consummation of the
Exchange Offer and the effective date of any
post-effective amendment to the Exchange Offer
Registration Statement:
(1) a certificate, dated the date of
Consummation of the Exchange Offer or the date of
effectiveness of the Shelf Registration
Statement, as the case may be, signed on behalf
of the Company by the President or any Vice
President, confirming, as of the date thereof,
the matters set forth in paragraphs (g) and (q)
of Section 2 of the Purchase Agreement (to the
extent applicable) and such other matters as the
Holders, underwriter(s) and/or Restricted Broker
Dealers may reasonably request; and
(2) a letter, dated the date of Consummation
of the Exchange Offer (and the effective date of
any post-effective amendment to the Exchange
Offer Registration Statement) or the date of
effectiveness of the Shelf Registration Statement
(and each post-effective amendment thereto), as
the case may be, of counsel for the Company
substantially to the effect that such counsel
have participated in conferences with officers
and other representatives of the Company and the
Trustee, and have
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<PAGE>
considered the matters required to be stated
therein and the statements contained therein,
and, although such counsel have not independently
verified the accuracy, completeness or fairness
of such statements; and that such counsel advise
that, on the basis of the foregoing, no
information came to such counsel's attention that
caused such counsel to believe that the
applicable Registration Statement, at the time
such Registration Statement or any post-effective
amendment thereto became effective and, in the
case of the Exchange Offer Registration
Statement, as of the date of Consummation of the
Exchange Offer or the effective date of any
post-effective amendment to the Exchange Offer
Registration Statement, contained an untrue
statement of a material fact or omitted to state
a material fact required to be stated therein or
necessary to make the statements therein, in the
light of the circumstances under which they were
made, not misleading, or that the Prospectus
contained in such Registration Statement as of
its date and, in the case of the opinion dated
the date of Consummation of the Exchange Offer,
as of the date of Consummation, contained an
untrue statement of a material fact or omitted to
state a material fact necessary in order to make
the statements therein, in the light of the
circumstances under which they were made, not
misleading. Without limiting the foregoing, such
counsel may state further that such counsel
assume no responsibility for and express no
advice as to any financial statements,
Certificates and schedules thereto, and any other
accounting or financial data included in any
Registration Statement contemplated by this
Agreement or the related Prospectus; and
(B) set forth in full or incorporate by reference
in the underwriting agreement, if any, in connection
with any sale or resale pursuant to any Shelf
Registration Statement the indemnification provisions
and procedures of Section 6 with respect to all
parties to be indemnified pursuant to said Section;
and
(C) deliver such other documents and certificates
as may be reasonably requested by the selling Holders,
the underwriter(s), if any, and Restricted Broker
Dealers, if any, to evidence compliance with clause
(A) above and with any customary conditions contained
in the underwriting agreement or other agreement
entered into by the Company pursuant to this clause
(ix).
The above shall be done at each closing under such
underwriting or similar agreement, as and to the extent
required thereunder, and if at any time the representations
and warranties of the Company contemplated in (A)(1) above
cease to be true and correct, the Company shall so advise
the underwriter(s), if any, the selling Holders and each
Restricted Broker-Dealer promptly and, if requested by such
Persons, shall confirm such advice in writing;
(x) prior to any public offering of Transfer
Restricted Securities, cooperate with the selling Holders,
the underwriter(s), if any, and its counsel in connection
with
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the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws
of such jurisdictions as the selling Holders or
underwriter(s), if any, may request and do any and all
other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Transfer
Restricted Securities covered by the applicable
Registration Statement; provided, however, that none of the
Company shall be required to register or qualify as a
foreign corporation where it is not now so qualified or to
take any action that would subject it to the service of
process in suits or to taxation, other than as to matters
and transactions relating to the Registration Statement, in
any jurisdiction where it is not now so subject;
(xi) use its best efforts to cause the disposition of
the Transfer Restricted Securities covered by the
Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the
underwriter(s), if any, to consummate the disposition of
such Transfer Restricted Securities, subject to the proviso
contained in clause (x) above;
(xii) subject to Section 4(c)(i), if any fact or event
contemplated by Section 4(c)(iii)(D) above shall exist or
have occurred, prepare a supplement or, if required,
post-effective amendment to the Registration Statement or
related Prospectus or any document incorporated therein by
reference or file any other required document so that, as
thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an
untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in
the light of the circumstances under which they were made,
not misleading;
(xiii) provide a CUSIP number for all Initial
Certificates or Exchange Certificates covered by a
Registration Statement not later than the effective date of
such Registration Statement and use its best efforts to
ensure that all Exchange Certificates have the same CUSIP
number;
(xiv) cooperate and assist in any filings required to
be made with the NASD and in the performance of any due
diligence investigation by any underwriter (including any
"qualified independent underwriter") that is required to be
retained in accordance with the rules and regulations of
the NASD, and use its best efforts to cause such
Registration Statement to become effective and approved by
such governmental agencies or authorities as may be
necessary to enable the Holders selling Transfer Restricted
Securities to consummate the disposition of such Transfer
Restricted Securities;
(xv) cause the Trust Agreement to be qualified under
the TIA not later than the effective date of the first
Registration Statement required by this Agreement and, in
connection therewith, cooperate with the Trustee and the
Holders of Certificates to effect such changes to the Trust
Agreement as may be required for such Trust Agreement to be
so qualified in accordance with the terms of the TIA; and
execute and
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use its best efforts to cause the Trustee to execute, all
documents that may be required to effect such changes and
all other forms and documents required to be filed with the
Commission to enable such Trust Agreement to be so
qualified in a timely manner; and
(xvi) provide promptly to each Holder upon request
each document filed with the Commission with respect to the
Trust pursuant to the requirements of Section 13 or Section
15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by
acquisition of a Transfer Restricted Security that, upon receipt
of the notice referred to in Section 4(c)(i) or Section
4(c)(iii)(D), such Holder will forthwith discontinue disposition
of Transfer Restricted Securities pursuant to the applicable
Registration Statement until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section
4(c)(xv), or until it is advised in writing by the Company that
the use of the Prospectus may be resumed, and has received copies
of any additional or supplemental filings that are incorporated
by reference in the Prospectus (the "Advice"). If so directed by
the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such
Transfer Restricted Securities that was current at the time of
receipt of either such notice. In the event the Company shall
give any such notice, the time period regarding the effectiveness
of such Registration Statement set forth in Section 2 or 3, as
applicable, shall be extended by the number of days during the
period from and including the date of the giving of such notice
pursuant to Section 4(c)(i) or Section 4(c)(iii)(D) to and
including the date when each selling Holder covered by such
Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section
4(c)(xii) or shall have received the Advice.
Section 5. Registration Expenses. All expenses
incident to the Company's performance of or compliance with this
Agreement will be borne by the Company, regardless of whether a
Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses
(including filings made by any purchaser or Holder with the NASD
(and, if applicable, the fees and expenses of any "qualified
independent underwriter") and its counsel that may be required by
the rules and regulations of the NASD); (ii) all fees and
expenses of compliance with federal securities and state Blue Sky
or securities laws; (iii) all expenses of printing (including
printing certificates for the Exchange Certificates to be issued
in the Exchange Offer and printing of Prospectuses), messenger
and delivery services and telephone; (iv) all reasonable fees and
disbursements of counsel for the Company and the Trust; (v) all
application and filing fees in connection with listing the
Certificates on a national securities exchange or automated
quotation system pursuant to the requirements hereof; and (vi)
all rating agency fees in connection with obtaining any rating of
the Exchange Certificates sought by the Company.
The Company will, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its
officers and employees performing legal or
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accounting duties) and the fees and expenses of any Person,
including special experts, retained by the Company.
The Company will not be responsible for the fees and
expenses of counsel to the Initial Purchaser or any Holder.
Section 6. Indemnification. (a) The Company agrees to
indemnify and hold harmless (i) each Holder and (ii) each person,
if any, who controls (within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act) any Holder (any of the persons
referred to in this clause (ii) being hereinafter referred to as
a "controlling person") and (iii) the respective officers,
directors, partners, employees, representatives and agents of any
Holder or any controlling person (any person referred to in
clause (i), (ii) or (iii) may hereinafter be referred to as an
"Indemnified Holder"), to the fullest extent lawful, from and
against any and all losses, claims, damages, liabilities,
judgments, actions and expenses (including without limitation and
as incurred, reimbursement of all reasonable costs of
investigating, preparing, pursuing or defending any claim or
action, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, including the reasonable
fees and expenses of counsel to any Indemnified Holder) directly
or indirectly caused by, related to, based upon, arising out of
or in connection with any untrue statement or alleged untrue
statement of a material fact contained in any Registration
Statement, preliminary prospectus or Prospectus (or any amendment
or supplement thereto), or any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or expenses
are caused by an untrue statement or omission or alleged untrue
statement or omission that is made in reliance upon and in
conformity with information relating to such Holder furnished in
writing to the Company by such Holder expressly for use therein.
This indemnity agreement will be in addition to any liability
that the Company may otherwise have.
In case any action or proceeding (including any
governmental or regulatory investigation or proceeding) shall be
brought or asserted against any of the Indemnified Holders with
respect to which indemnity may be sought against the Company,
such Indemnified Holder shall promptly notify the Company in
writing (provided that the failure to give such notice shall not
relieve the Company of its obligations pursuant to this
Agreement). Such Indemnified Holder shall have the right to
employ its own counsel in any such action and the fees and
expenses of such counsel shall be paid, as incurred, by the
Company; provided, however the such Indemnified Holder shall
promptly reimburse the Company for any amounts paid in respect of
this Section 6(a) if it is ultimately determined that an
Indemnified Holder is not entitled to indemnification hereunder.
The Company shall not, in connection with any one such action or
proceeding or separate but substantially similar or related
actions or proceedings in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) at any time for such
Indemnified Holders, which firm shall be designated by the
Holders. The Company shall be liable for any settlement of any
such action or proceeding effected with its prior written
consent, which consent shall not
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<PAGE>
be withheld unreasonably, and each Company agrees to indemnify
and hold harmless each Indemnified Holder from and against any
loss, claim, damage, liability or expense by reason of any
settlement of any action effected with its written consent.
Notwithstanding the immediately preceding sentence, if at any
time an Indemnified Holder shall have requested an indemnifying
party to reimburse the Indemnified Holder for fees and expenses
of counsel as contemplated by the second sentence of this
paragraph, the indemnifying party agrees that it shall be liable
for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than twenty
business days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have
reimbursed the Indemnified Holder in accordance with such request
prior to the date of such settlement. The Company shall not,
without the prior written consent of each Indemnified Holder,
settle or compromise or consent to the entry of judgment in or
otherwise seek to terminate any pending or threatened action,
claim, litigation or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether
or not any Indemnified Holder is a party thereto), unless such
settlement, compromise, consent or termination includes an
unconditional release of each Indemnified Holder from all
liability arising out of such action, claim, litigation or
proceeding.
(b) Each Holder of Transfer Restricted Securities agrees,
severally and not jointly, to indemnify and hold harmless the
Company, and its directors, officers, and any person controlling
(within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) the Company, and the respective officers,
directors, partners, employees, representatives and agents of
each such person, to the same extent as the foregoing indemnity
from the Company to each of the Indemnified Holders, but only
with respect to claims and actions based on information relating
to such Holder furnished in writing by such Holder expressly for
use in any Registration Statement. In case any action or
proceeding shall be brought against the Company or its directors
or officers or any such controlling person in respect of which
indemnity may be sought against a Holder of Transfer Restricted
Securities, such Holder shall have the rights and duties given
the Company, and the Company, such directors or officers or such
controlling person shall have the rights and duties given to each
Holder by the preceding paragraph. In no event shall any Holder
be liable or responsible for any amount in excess of the amount
by which the total received by such Holder with respect to its
sale of Transfer Restricted Securities pursuant to a Registration
Statement exceeds (i) the amount paid by such Holder for such
Transfer Restricted Securities and (ii) the amount of any damages
which such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged
omission. This indemnity agreement will be in addition to any
liability that any such Holder may otherwise have.
(c) If the indemnification provided for in this Section 6
is unavailable to or insufficient to hold harmless an indemnified
party under Section 6(a) or Section 6(b) (other than by reason of
exceptions provided in those Sections) in respect of any losses,
claims, damages, liabilities or expenses referred to therein,
then each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses in such
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<PAGE>
proportion as is appropriate to reflect the relative benefits
received by the Company, on the one hand, and the Holders, on the
other hand, from its sale of Transfer Restricted Securities or if
such allocation is not permitted by applicable law, the relative
fault of the Company, on the one hand, and of the Indemnified
Holder, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative fault of the Company, on the one
hand, and of the Indemnified Holder, on the other hand, shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Indemnified Holder
and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement
or omission. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set
forth in the second paragraph of Section 6(a), any legal or other
fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim.
The Company and each Holder of Transfer Restricted
Securities agree that it would not be just and equitable if
contribution pursuant to this Section 6(c) were determined by pro
rata allocation (even if the Holders were treated as one entity
for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in
the immediately preceding paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims,
damages, liabilities or expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, no Holder or
its related Indemnified Holders shall be required to contribute,
in the aggregate, any amount in excess of the amount by which the
total received by such Holder with respect to the sale of its
Transfer Restricted Securities pursuant to a Registration
Statement exceeds the sum of (A) the amount paid by such Holder
for such Transfer Restricted Securities plus (B) the amount of
any damages which such Holder has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute pursuant to this Section 6(c) are
several in proportion to the respective principal amount of
Transfer Restricted Securities held by each of the Holders
hereunder and not joint.
(e) The provisions of this Section 6 will remain in full
force and effect, regardless of any investigation made by or on
behalf of any Holder or the Company or any of the officers,
directors or controlling persons referred to in this Section 6,
and will survive the sale by a Holder of Certificates covered by
a Registration Statement.
Section 7. Underwritten Offering. No Holder may
participate in any Underwritten Offering hereunder unless such
Holder (a) agrees to sell such Holder's Transfer
<PAGE>
Restricted Securities on the basis provided in customary
underwriting arrangements entered into in connection therewith
and (b) completes and executes all reasonable questionnaires,
powers of attorney, and other documents required under the terms
of such underwriting arrangements.
Section 8. Selection Of Underwriters. For any
Underwritten Offering, the investment banker or investment
bankers and manager or managers for any Underwritten Offering
that will administer such offering will be selected by the
Holders of a majority in aggregate principal amount of the
Transfer Restricted Securities included in such offering. Such
investment bankers and managers are referred to herein as the
"underwriters."
Section 9. Miscellaneous.
(a) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and
waivers or consents to or departures from the provisions hereof
may not be given unless (i) in the case of Section 4 hereof and
this Section 9(a)(i), the Company has obtained the written
consent of Holders of all outstanding Transfer Restricted
Securities and (ii) in the case of all other provisions hereof,
the Company has obtained the written consent of Holders of a
majority of the outstanding principal amount of Transfer
Restricted Securities, provided that, with respect to any matter
that directly or indirectly affects the rights of the Initial
Purchaser, the Company shall obtain the written consent of the
Initial Purchaser against which such amendment, modification,
supplement, waiver or consent is to be effective. Notwithstanding
the foregoing, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of
Holders whose securities are being tendered pursuant to the
Exchange Offer and that does not affect directly or indirectly
the rights of other Holders whose securities are not being
tendered pursuant to such Exchange Offer may be given by the
Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities subject to such Exchange Offer.
(b) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by
hand-delivery, first-class mail (registered or certified, return
receipt requested), facsimile, or air courier guaranteeing
overnight delivery:
(i) if to a Holder, at the address set forth on the
records of the Trustee under the Trust Agreement; and
(ii) if to the Company:
Prudential Securities Structured Assets, Inc.
One Seaport Plaza
New York, New York 10292
Attention: Robert Troiano
Telecopier No.: (212) 214-7535
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<PAGE>
and: Terrance O'Dwyer
Telecopier: No. (212) 778-4556
(i) if to Initial Purchaser:
Prudential Securities Incorporated
One New York Plaza
15th Floor
New York, New York 10262
Telecopier No.: (212) [ ]
Attention:
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if
telecopied; and on the next business day, if timely delivered to
an air courier guaranteeing overnight delivery.
(c) Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the successors and assigns
of each of the parties, including without limitation and without
the need for an express assignment, subsequent Holders of
Transfer Restricted Securities; provided, however, that this
Agreement shall not inure to the benefit of or be binding upon a
successor or assign of a Holder unless and to the extent such
successor or assign acquired Transfer Restricted Securities
directly from such Holder.
(d) Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute
one and the same agreement.
(e) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(f) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS-OF-LAW
PROVISIONS.
(g) Severability. In the event that any one or more of
the provisions contained herein, or the application thereof in
any circumstance, is held invalid, illegal or unenforceable, to
the extent permitted by law the validity, legality and
enforceability of any such provision in every other respect and
of the remaining provisions contained herein shall not be
affected or impaired thereby.
(h) Entire Agreement. This Agreement is intended by the
parties as a final expression of its agreement and intended to be
a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject
matter contained
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<PAGE>
herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to
the Transfer Restricted Securities. This Agreement supersedes all
prior or contemporaneous oral, and all prior written, agreements
and understandings between the parties with respect to such
subject matter.
(i) Certificates Held by the Company. Whenever the
consent or approval of Holders of a majority in principal amount
of the Transfer Restricted Securities is required hereunder, the
Transfer Restricted Securities held by any of the Company or its
Affiliates (other than subsequent Holders who are deemed to be
Affiliates solely by reason of its holdings of such Transfer
Restricted Securities) shall not be counted in determining
whether such consent or approval was given by Holders of such
required majority.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
PRUDENTIAL SECURITIES STRUCTURED
ASSETS, INC.
By /s/ Terrance O'Dwyer
------------------------
Name: Terrance O'Dwyer
Title: Senior Vice President
PRUDENTIAL SECURITIES INCORPORATED
By /s/ Frank P. Sinatra
------------------------
Name: Frank P. Sinatra
Title: Managing Director
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